Royal Commission on the Distribution of Income and Wealth

Lord Lea of Crondall: asked Her Majesty's Government:
	Whether they will consider re-establishing the Royal Commission on the Distribution of Income and Wealth.

Lord McKenzie of Luton: My Lords, the Government have no plans to re-establish that commission. However, we are committed to social inclusion and economic prosperity for all, and recognise the importance of a strong evidence base. We publish Opportunity for All annually, with 60 indicators of poverty and social exclusion, and Households Below Average Income with annual data on income poverty and inequality; we also plan to deliver the first results of a new and comprehensive wealth and assets survey in 2007.

Lord Lea of Crondall: My Lords, I thank my noble friend for that reply. All those policies are very commendable, but is he aware that the British Social Attitudes Survey shows that 82 per cent of the British people—in other words, across the board—now believe that our society is too unequal? Perhaps they have looked across the North Sea and seen the more equal Scandinavian economies outperforming us, without those at the top end of their companies paying themselves year after year cash increases that are 50 times bigger than those paid to the average employee.
	Do we not now need an authoritative commission, including people from all income levels, that is able to get to the bottom of all this? Why, for example, should Britain be the most unequal country in the whole EU 25—certainly in the top three, along with Greece for that particular Olympic medal—

Noble Lords: Oh!

Lord Lea of Crondall: I am reading some statistics. And should not the commission make recommendations which it should see are carried out, including as regards remuneration committees where the undertakings have been reneged on?

Lord McKenzie of Luton: My Lords, my noble friend raises substantive and important issues that are difficult to deal with comprehensively in this kind of exchange but I shall try. First, on the issue of inequality, if we look at the data, median income has risen 70 per cent in real terms since 1996–97 and personal wealth has increased by about 50 per cent in real terms over that period.
	If we look at inequality as measured by the Genie co-efficient, the IFS analysis shows that after continuing rises in the early years of this Government before policy initiatives kicked in, that continued to rise, but it has fallen over the past three years. It is too early to say whether that shows a trend. It depends upon our continued success in tackling child poverty and pensioner poverty. However, we have stopped the inexorable rise in inequality that characterised the 1980s. In 1997 child poverty was higher in the UK than anywhere else in the EU and had more than doubled since the mid-1970s.

Baroness Noakes: My Lords, does the Minister agree that the creation of wealth in our economy has far greater importance than its distribution?

Lord McKenzie of Luton: My Lords, each is important. We need to have an economy that is successful, which we do; we need to create wealth, which we are in favour of, and we should not fetter the opportunity of people who create wealth; but at the same time we need to have policies in place to ensure that wealth is fairly shared. That means in the short term at least making sure that people have sufficient incomes, and in the longer term making sure that those people who are currently disadvantaged have pathways to sharing through training, re-education and all of those upskilling issues.

Lord Phillips of Sudbury: My Lords, do the Government not need to get to grips with the damage done to job satisfaction and a broad sense of fairness in our society by the fact that it is reported that this autumn 3,000 people in the City—dealers, brokers, bankers, and so on—will be getting bonuses of over £1 million?

Lord McKenzie of Luton: My Lords, the Government cannot regulate pay in the private sector for executives or directors. Perhaps I did not deal with the point raised earlier by my noble friend on directors' pay. Under this Government the Directors' Remuneration Report Regulations 2002 have come into force since August 2002, which has improved transparency and accountability and the reporting of performance linkage. A report in 2005 by Deloitte & Touche underlined the effectiveness of those actions so far as directors' pay is concerned, which showed that there had been a significant increase in the levels of compliance with the regulations, growing investor satisfaction with improved disclosure on directors' pay and awards, and that companies are changing their remuneration policies and practices to reflect the link between pay and performance.

Lord Barnett: My Lords, does my noble friend agree that we have a great deal of statistics on both wealth and income and the disparity in those two areas? Does he further accept, and will he confirm, that the real reason that the Government do not have it in mind to set up a Royal Commission is because they have no intention of doing anything about that disparity?

Lord McKenzie of Luton: My Lords, with respect, my noble friend is completely wrong about that. It has been at the heart of the Government's policies to tackle those things. I shall reiterate the components: to help people into work, which is a way of sharing in the wealth of the country; to help those families with children to ensure that they are removed from child poverty; and to make sure that the lot of pensioners—their position in relation to poverty—is improved.

Noble Lords: Oh!

Lord McKenzie of Luton: My Lords, there is a lot of information to impart. If one asks the question one should get an answer about what is going on. Some 2 million pensioners have been lifted out of absolute low income under this Government, and between 1996–97 and 2003–04 the proportion of pensioners living in households with relative low incomes after housing costs fell by a quarter or 700,000 people. That is tackling issues of inequality, and there is a similar story on tackling child poverty.

Lord Crickhowell: My Lords, since some of the greatest wealth is now to be found on the Benches behind the Minister, how will he ensure that that wealth is fairly distributed?

Lord McKenzie of Luton: My Lords, government policies do not discriminate between those on these Benches or on the Benches opposite. We seek to treat all people fairly and reasonably.

The Earl of Listowel: My Lords—

Lord Christopher: My Lords—

Lord Davies of Oldham: My Lords, it is the turn of the Cross-Benches.

The Earl of Listowel: My Lords, will the noble Lord consider investing significantly more in foster carers? They are often among the poorest in our society, and some of them are out of pocket for the care that they provide for children. Furthermore, investing in and recruiting foster carers would not only raise that group up but would provide more stability for children in the care of the state, and those children would do significantly better.

Lord McKenzie of Luton: My Lords, it is not for me to set the public expenditure framework at the Dispatch Box, but the noble Earl is absolutely right.
	The Government have invested more funds in this direction. The reality is that there is never enough money to do everything we want as soon as we want. Certainly arrangements which help young children in particular, and create better life chances for them, are important and are at the heart of what we are about.

Council Tax

Baroness Scott of Needham Market: asked Her Majesty's Government:
	What estimates they are making for council tax rises in 2006–07.

Baroness Andrews: My Lords, the Government are committed to supporting local authorities in delivering improvements in key public services without imposing excessive demands on their council tax payers. The Government do not forecast future increases in council tax. Council tax rises in 2006–07 will depend on local authorities' spending decisions.

Baroness Scott of Needham Market: My Lords, is the noble Baroness aware that the Local Government Association has identified a shortfall of around £1 billion in spending for adult social services and children's services as a result of spiralling demand, more imposition from central government, reduction in central government grant under the Supporting People programme, and higher than average cost inflation? When the Government set the level at which local authority expenditure is capped, will they take into account the duty owed by local authorities to the most vulnerable and needy people in their areas?

Baroness Andrews: My Lords, we are certainly aware that the Local Government Association has identified that sum, but we do not agree with it. We agree with the drivers on pressure the noble Baroness identified, and we are working with the LGA, looking at the papers it presented to us, and at ways to mitigate our pressures, and so on. We will obviously think about this matter seriously. Our problem is that some of the estimates are unsubstantiated: for example, returns from some local authorities are uncosted. We have begun consultations on costs; for example, the minimum fostering allowance. We have problems with some of the assumptions, and therefore with the totality of the estimates, but we believe that the level of grant we anticipate will meet the increased pressures.

Baroness Gardner of Parkes: My Lords, is special provision made for stress areas that receive large numbers of asylum seekers?

Baroness Andrews: My Lords, the share of spending will reflect all the different pressures that go into making up the services as a whole.

Baroness Greengross: My Lords, what are the Government doing to increase the take-up of council tax benefit by pensioners? In spite of the Government's efforts to improve the income of pensioners, about which we heard in the previous Question, there are many who find the tax terribly difficult to pay and still have big problems. What are the Government doing?

Baroness Andrews: My Lords, the noble Baroness asks a very good question. We are concerned. We have 2.4 million of the poorest people in the country missing out on council tax benefit and pensioners' take-up is between 60 per cent and 65 per cent of what it should be. We are doing something that is quite innovative: the Pension Service is ringing pensioners who think they might be entitled to claim council tax benefit. It takes the details over the phone, fills in the forms and sends them out, so the pensioner has only to sign them. All those applying for pension credit will, from September, be able to have their council tax benefit processed on the phone. That will help, and ultimately we want to move to a situation where people who are entitled get automatic benefit. We are working hard to see how that can be achieved.

Baroness Hanham: My Lords, is the experience of revaluation in Wales what has caused the Government to take fright over revaluation in this country? Will the Government make permanent the temporary, transitional relief in Wales, on the revaluation?

Baroness Andrews: My Lords, council tax in Wales was a matter for the Welsh Assembly, and we did not take fright. The reasons for postponing the council tax revaluation here were set out in great detail on 20 September. We asked Sir Michael Lyons to look at the current and emerging strategic role of local government—we all know the many different things that have changed in local government in recent years. In the light of this work, he will address the critical funding issues which will include those of fairness and accountability. Revaluation, when it comes, will reflect that.

Lord Greaves: My Lords, the Government have given local authorities stringent targets for efficiency savings under the Gershon proposals and reforms. They have done so to allow local authorities to improve and invest in services, which is what the Minister referred to in her Answer. Many local authorities are doing that successfully. Will she assure the House and local authorities that the efficiency gains made throughout the country through the Gershon programme will not be clawed back by central government to solve their own funding problem with the council tax next May?

Baroness Andrews: My Lords, it is true that some local authorities across the country—ones as different as Camden and Warwickshire—are making efficiency savings and improving services. We are pleased to see it and want it to happen in every local authority. It is interesting that the local government authority papers, which are clearly committed to making efficiencies, state that there are opportunities to work smarter and better, to stabilise services and to drive down costs. That is why the target for delivering efficiencies to the end of 2005, which would be savings of £2.15 billion, should be exceeded.

Government: Better Regulation

Lord Peyton of Yeovil: asked Her Majesty's Government:
	What steps they have so far taken to carry out their commitment to lessen the load of government, in particular to streamline regulatory structures and reduce the quantity of legislation.

Lord Bassam of Brighton: My Lords, the Better Regulation Executive was established in May 2005 to lead the work on promoting better regulation across government. It is on track to deliver the commitments set out in the March 2005 Budget and the better regulation action plan published in May this year.

Lord Peyton of Yeovil: My Lords, I hardly know what to say. Is the noble Lord aware that, in that Answer, he has not even reached the low level of expectation that I had when I tabled the Question? Is it possible that he and some of his colleagues are not aware of the fact that the Government increasingly are and have been for some time a burden that should be lightened? Is there no hope of such a thing happening?

Lord Bassam of Brighton: My Lords, I am surprised at the noble Lord's approach to this important Question. I am sure that he is aware that we as a government have done a great deal to reduce the burdens on business. Only in the past few years we have exempted 900,000 companies from audit requirements, and now provide the highest VAT threshold in Europe. We have reduced payroll burdens for 1.2 million businesses and, as noble Lords on the opposition Front Benches are well aware, have introduced changes to the planning system that make it faster, fairer and more efficient. Those are concrete reductions in the way in which government operates. I am surprised at the noble Lord; if I remember rightly, just last week he and many other noble Lords were urging yet another regulatory measure on us—a Civil Service Act.

Lord Waddington: My Lords, what are Ministers in this Government doing to persuade their colleagues in the EU that, somehow or other, the endless flow of regulations promoted by the Commission has to be abated? When will the Government start arguing for the Commission to be deprived of its sole right to initiate legislation, which means that it alone has the right to initiate repealing legislation to get rid of some of the unnecessary legislation clogging up the system?

Lord Bassam of Brighton: My Lords, our Government are taking a lead in Europe to deal with regulation. I agree with the noble Lord's fundamental point that regulatory reform is important if European business is to remain competitive in a global economy. I would be absolutely on his side on that. It is also worth recalling that, on 25 October this year, the Commission itself announced plans to simplify some 1,400 regulations and remove unnecessary burdens. The Commission recently announced that it would withdraw 68 proposals that do not follow what it and governments generally consider best regulatory practice. We are winning the argument in Europe about the need to have proportionate regulation; that is what we need to ensure if we are to have thriving business across the EU.

Lord Howarth of Newport: My Lords, does my noble friend agree that of course people do not want excessive government; they vote Labour because they want better—fair and decent—government; and that since 1997 that is what we have had in the main?

Lord Bassam of Brighton: My Lords, I completely agree with the noble Lord, which will come as no surprise to your Lordships. We have to understand that regulation is extremely useful and beneficial. For instance, I know that it is alleged that we pile on regulation after regulation every year, but who among us would want to get rid of regulations that prevent child abduction, control the proceeds of crime, provide for flood defences, deal with disorderly behaviour, and so on? They are all necessary legislation. Who would want to abolish such regulations?

Lord Maclennan of Rogart: My Lords, are the Government acting on the advice of Sir David Arculus of the Better Regulation Task Force that better regulation would be assisted, particularly in respect of overlapping legislation, if they had a programme of codification and simplification at home, as well as encouraging it in the EU?

Lord Bassam of Brighton: My Lords, we have a process of simplifying and bringing together regulation to ensure that it does not overlap, which is part of the explanation behind the Government's decision to reduce the number of regulatory bodies from 31 to only seven. That is a bold move in itself, which will ensure that we get better focused regulations when they are introduced.

Lord Forsyth of Drumlean: My Lords, is the Prime Minister's decision to ignore the provisions of the ministerial code of conduct an example of the Government's commitment to deregulation?

Lord Bassam of Brighton: My Lords, that question is well wide of the mark. It is an absurd suggestion.

Lord Tebbit: My Lords, when a village shop proprietor wants to sell cheese by, for example, cutting pieces from a substantial Cheddar cheese, why is he required to install wash-basins, and facilities in the shop for assistants to wash their hands at every stage on grounds of public health? They do not do that in France, and they are not dying in droves there. Why cannot we do it the French way?

Lord Bassam of Brighton: My Lords, I am not sure that there is an answer to that. There is a line in my brief about doing it the Dutch way, but that does not relate to the noble Lord's question.

Baroness Wilcox: My Lords, a year or two ago my late and much missed friend Lady Blatch carried an amendment in this House requiring the Government to reduce the level of regulation on schools. By how much have teachers' paperwork and regulation on schools been reduced?

Lord Bassam of Brighton: My Lords, I shall not even try to answer that question. It is far too complex a matter to discuss in the way suggested by the noble Baroness. I know that we are extremely keen to reduce the burdens on teachers, and I am sure that we will be able to demonstrate to the noble Baroness that we have done exactly that.

Lord Phillips of Sudbury: My Lords, why is it necessary for this Parliament to legislate at two and three times the rate of comparable European countries?

Lord Bassam of Brighton: My Lords, I understand the point behind the noble Lord's question, but it is an oversimplification. The noble Lord is extremely good at encouraging us to legislate—I refer to the Charities Bill, for example. The Bill has become longer as a consequence of the noble Lord's involvement, which I am sure is only to improve the quality of the legislation.

Lord Elton: My Lords, will the Minister kindly place in the Library his written answer to the question asked by my noble friend Lady Wilcox so that we can discover what it is?

Lord Bassam of Brighton: My Lords, I am happy to ask our officials to make an estimate of the kind sought by the noble Baroness and will happily share it with the House.

Iran: Presidential Comments on Israel

Lord Corbett of Castle Vale: asked Her Majesty's Government:
	What is their response to the statement by Iranian President Mahmoud Ahmadinejad on the extinction of the state of Israel.

Lord Triesman: My Lords, the United Nations Security Council has spoken for the whole international community in condemning the remarks about Israel made by President Ahmadinejad. We summoned the Iranian chargé d'affaires on 27 October to protest. On the same day, we issued a statement on behalf of the European Union heads of government which condemned the comments in the strongest terms. The statement emphasised that calls for violence and for the destruction of any state are manifestly inconsistent with any claim to be a mature and responsible member of the international community.

Lord Corbett of Castle Vale: My Lords, I thank my noble friend for that reply. I suggest to him that the best response to that incitement to terrorism—that is what it was—is to treat the Iranian resistance as a friend who stands in the way of the mullahs' attempts to produce a lethal mix of Islamic fundamentalism and nuclear weapons. Will the Minister now review or remove the proscription on the Iranian resistance to signal support for those helping the people of Iran to achieve, through a saffron revolution, the democracy that the mullahs most fear?

Lord Triesman: My Lords, I understand why my noble friend has made that proposition, but I regret to tell him that we have no plans to carry out such a review. The MEK is proscribed in the United Kingdom under the Terrorism Act 2000. The MEK has a long history of involvement in terrorism in Iran and elsewhere and is, by its own admission, responsible for violent attacks that have resulted in many deaths. The MEK is listed in the United States as a foreign terrorist organisation and is on the EU's asset-freeze list. Its claims to be a democratic party, fighting for a better Iran, are hard to square with its history of violence and authoritarian acts.

Lord Howell of Guildford: My Lords, does the Minister agree that it is now getting extremely hard to divine and to fathom what the Government's policy is towards Iran? Every initiative taken by the Foreign Secretary and his European colleagues on a quiet diplomatic basis seems to have failed. Will the Minister tell the House how the situation at the Security Council will shape out? Does not the key to any more forceful pressures on Iran lie with the agreement of China? Is he aware that China has just signed a $100 billion gas and oil contract with Iran? Will he undertake to jog the elbow of his colleague, the Foreign Secretary, to raise this matter with the Chinese leader, Mr Hu, when he visits London next week?

Lord Triesman: My Lords, all the permanent members of the Security Council, and others, are fully cognisant of the difficulties in achieving some of the changes that we need. We are not na-ve about the nature of the regime that we are dealing with. We do not underestimate the difficulties on the nuclear issue, on Iraq, on human rights, on fundamental freedoms, on the peace process and on terrorism. But Iran and those issues are too important for us—or China or any other country—to sit on our hands. The options have to be looked at realistically. Cutting links with Iran will do nothing to advance those objectives. The United States, which has no contacts with Iran, continues to urge us to maintain our contacts with Iran to try to keep some dialogue going. These are difficult circumstances and we must all in the Security Council work together for a peaceful resolution of those issues before the situation spills into a worse one.

Baroness Williams of Crosby: My Lords, will the Minister accept that the whole House and the whole of Parliament are entirely with the Secretary-General of the United Nations, the Security Council and the Prime Minister in making plain our absolute unwillingness to accept the ludicrous claim of the new president of Iran? For many of us, this has echoes of an earlier era, when talk about abolishing whole races and countries was frequently heard. However, can the Minister confirm that the ambassadors of Iran to London and to Geneva have been recalled, partly because of the conciliatory positions taken by those particular diplomats? Finally, will he recognise that for many of us the crucial key to Iran is to begin to build up much stronger support among the younger people in that country who clearly do not share the fanatical views of some of their leaders. One contribution that can be made towards that is to move ahead with the road map, which seems to be stuck in the way.

Lord Triesman: My Lords, I am grateful to the noble Baroness, Lady Williams of Crosby, for the points that she made. If we are able to reach younger people in Iran—there is a good deal of evidence that they plainly have different views—there are good prospects for the future. As the noble Baroness said, the remarks made by the president of Iran just a few days ago reflect what the Canadian foreign minister described as evidence of the same kind of hatred, anti-Semitism and intolerance that have been heard elsewhere before. A number of Iranian diplomats have also been sacked by the president in the last few days, at least according to media accounts. I have heard nothing that contradicts those.
	I impress upon the House that, however difficult it is, when one looks at the range of options before us, it is a matter of building carefully with those who are our friends in Iran, who are part of the future of Iran, and not finding ourselves in an escalating position where the steps that we take generate more conflict, rather than making an attempt to resolve matters by peaceful and diplomatic means.

The Lord Bishop of Rochester: My Lords, President Mahmoud Ahmadinejad notwithstanding, can the Minister assure us that the Government will do all they can to keep lines of communication open, not only with younger people but with academics, the ulema—many of whom are very progressive—and with the bulk of ordinary citizens in Iran who want to be part of the international community? How do the Government propose to keep these lines of communication open?

Lord Triesman: My Lords, we must try to keep those lines of communication open. Obviously, the ways in which we do it in a democratic country do not rely only on the Government. Independent institutions, such as the BBC through the World Service, broadcast objectively and fairly on all the matters about which people in Iran no doubt seek the truth, in just the same way that we would. For our part, we will continue to use those instruments at our disposal, such as the Chevening scholarships and other means of getting to younger people, including exchanges with our university institutions. I do not suggest for a moment that this is a quick or easy resolution of the kinds of difficulties identified in the House this afternoon, but they are all means that we must deploy.

Company Law Reform Bill [HL]

Lord Sainsbury of Turville: My Lords, I beg to introduce a Bill to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other forms of business organisation; to make provision about business names, auditors and actuaries; to amend Part 9 of the Enterprise Act 2002; and for connected purposes. I beg to move that this Bill be now read a first time.
	Moved, That the Bill be now read a first time.—(Lord Sainsbury of Turville.)
	On Question, Bill read a first time, and ordered to be printed.

Merits of Statutory Instruments

Lord Brabazon of Tara: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the Baroness Maddock be appointed a member of the Select Committee in the place of the Lord Addington.—(The Chairman of Committees.)

On Question, Motion agreed to.

Civil Aviation Bill

Lord Davies of Oldham: My Lords, I beg to move that this Bill be now read a second time.
	Aviation is our gateway to the world. The range of destinations served directly by regional airports has expanded enormously in recent years. More and cheaper flights afford opportunities to travel undreamt of by earlier generations, with half the population flying at least once a year. Many fly more frequently as business travellers competing in the global marketplace or as leisure travellers taking advantage of the greater opportunities to discover other countries and cultures and, sometimes, to benefit from their better weather.
	Aviation makes a substantial contribution to our national economy, estimated at £10 billion in 2002, which represents about 1 per cent of economic activity in the UK. The industry provides 200,000 jobs directly, and three times that number indirectly. Air passenger duty contributes just under a billion pounds a year to the Exchequer.
	So here we have a successful industry. However, no debate can ignore the fact that those living close to airports may not necessarily see aviation in such a positive light. To some it has a significant negative impact on their quality of life. This Bill will honour a number of important White Paper and other commitments covering both environmental and consumer protection issues.
	Over the years, there has been an increase in air traffic, but there have also been substantial improvements in the noise levels of jet aircraft, and noise at many of our major airports has reduced significantly as a result. It remains important, none the less, that communities affected by noise should feel assured that their interests are taken fully into account as the aviation industry continues to develop. Part of a government-sponsored research project is therefore investigating whether peoples' attitude to aircraft noise has changed since the 1980s, when research underpinning our current understanding of the relationship between annoyance and aircraft noise was carried out. This study is due to report next year. I am pleased that this Bill will strengthen and clarify powers to control aircraft noise and emissions, in line with the commitments made in The Future of Air Transport White Paper.
	The Bill will amend the powers by which the Secretary of State currently controls aircraft noise at Heathrow, Gatwick and Stansted. The Bill will also introduce new statutory provisions for controlling aircraft noise at airports where the Secretary of State does not exercise these powers. We consulted on our proposals in 2000 and announced our conclusions in 2003 as part of the White Paper package of announcements. Section 78 of the Civil Aviation Act 1982 empowers the Secretary of State to exercise direct control of noise measures at "designated" airports. Heathrow, Gatwick and Stansted have been designated and noise control measures at these airports include noise preferred routes, departure noise limits and night noise restrictions.
	Although we consider the existing powers to be broadly appropriate, the White Paper gave a commitment that we would amend Section 78 so that controls such as night restrictions might, subject to public consultation, be set in future by reference to the amount of noise generated by aircraft alone, without a separate movements limit. This would mean that the primary control at an airport regulated by the Secretary of State could be related more directly to the noise nuisance, providing a more effective incentive for airlines to acquire, use and develop quieter aircraft.
	I should emphasise however that amending these powers should not be interpreted as a precursor to any immediate change in policy for noise control at the designated airports. For example, the proposals in the stage 2 consultation on night flight restrictions at Heathrow, Gatwick and Stansted which closed recently, on 16 September, is based on the legislation as it currently stands. I can confirm that the final decision will set limits for night flights until 2012 for both movements and noise quotas.
	I can assure noble Lords that any proposals to change the arrangements by which we control noise at the three designated airports would be subject to consultation in the normal way. Although we have done so voluntarily for many years, this is now a requirement of European legislation.

Lord Mawhinney: My Lords, will the Minister assure the House that the Government have no plans to designate airports other than the three to which he has made reference?

Lord Davies of Oldham: My Lords, as I shall indicate later in my speech, we are taking powers with regard to certain controls, but not in terms of designation beyond the three airports. I hope to be covering that point as I develop my remarks.
	Although the Government have a direct role in noise control at the three designated airports, elsewhere airports are, apart from any planning restrictions that may apply, responsible for their own noise control arrangements, usually as part of their conditions of use. This accords with our longstanding policy, re-emphasised in the White Paper, that wherever possible aircraft noise problems are best resolved locally by the airport working with the local community. In the majority of cases this works well.
	However, in the White Paper and the department's Control of Noise from Civil Aircraft: The Government's Conclusions, we gave a commitment to clarify and enhance airport powers in statute. Although the majority of airports have introduced noise control measures as part of their conditions of use, and civil aviation legislation contains a number of provisions relating to environmental issues, this does not include any explicit statutory provision for airport managers to control aircraft noise. The Bill therefore provides explicit statutory powers for airports to develop noise control schemes.
	The Bill defines the maximum area within which the airport's powers to control aircraft noise apply, although there is provision for the Secretary of State to alter this in individual cases by consultation. The standard definition is designed to encompass noise-related operating procedures, such as noise preferred routing for aircraft taking off, which go significantly beyond the boundaries of the airport itself. The Bill also puts on a statutory footing the ability of airports to impose penalties on aircraft operators that have not complied with the terms of a noise control scheme. We are aware of one major airport, for example, which is awaiting statutory powers before imposing discretionary financial penalties for aircraft deviating from preferred noise routes.
	The power for airports to impose penalties is balanced however with a requirement that aircraft operators should have an opportunity to make representations to the airport operator regarding the imposition of penalties. The ideal situation of course is that by airports and airlines working collaboratively—which they do in the majority of cases—the need for financial penalties is kept to the absolute minimum. But where financial penalties are appropriate, as a measure of last resort, the Bill provides for the local community to benefit from this money; which in practice tends to happen anyway.
	I emphasise that where existing arrangements are working satisfactorily the expectation will be that such arrangements will carry on. But the provisions of the Bill are designed to help those airports which may be looking to refresh or enhance their existing arrangements in the future. In the case of larger airports—those with over 50,000 movements per year—the Aerodromes (Noise Restrictions) (Rules and Procedures) Regulations 2003 set out the procedures that major airports should follow when considering measures to deal with noise problems. That reflects the adoption by the EU of the International Civil Aviation Organisation's balanced approach—in short, that airports should not impose measures more restrictive than necessary to achieve noise objectives and should not discriminate on grounds of nationality, air carrier or manufacturer. Although the regulations currently apply to 10 airports the White Paper explained that the Government expect the underlying principles to be applied at all significant UK airports.
	Civil aviation legislation currently enables licensed airports to fix their charges for using the airport by reference to the noise aircraft make. Additionally, the Secretary of State may direct an airport to do this, although he has not found it necessary to do so to date. However, this legislation goes back to 1982, when there would have been little or no expectation that airports would wish to vary their charges by reference to aircraft emissions.
	The Government's air quality strategy has since set out air quality objectives for air pollutants intended to protect human health as well as vegetation and ecosystems. These are derived from EU air quality directives. Although on a national scale the contribution of air transport to these impacts is small—certainly compared with road traffic for example—its effect can be significant in individual cases. We therefore gave a commitment in the White Paper that the Government would bring forward legislation enabling the Secretary of State to require an emissions-related element to be included in landing charges at airports where there are local air quality problems.
	In fact, BAA has already incorporated an oxides of nitrogen emissions element, based on European classification of aircraft for emissions charging, into its airport charges at both Heathrow and Gatwick as part of the conditions of use. By making explicit the power to do so in statute, the Government wish to send a clear message that they support airports that want to incorporate the use of economic incentives to help tackle any local air quality problems. The Secretary of State will retain the discretion to issue a direction in individual cases, should he consider this necessary at some future date.
	It has been suggested in another place that provisions to deal with aviation's contribution to climate change are missing from the Bill. In addition to setting out the Government's plans for tackling local air quality problems, the Future of Air Transport White Paper also set out the way in which we intend to tackle that contribution to climate change; namely, that the best way of ensuring that aviation contributes towards the goal of climate stabilisation would be through a well designed, open emissions trading regime.
	As aviation is an international industry, an international trading regime would obviously be the best solution. Therefore, we are pressing for the development and implementation, through the International Civil Aviation Organisation, of such a regime. A greenhouse gas trading scheme is already in operation in Europe and we have also been working to include intra-EU air services in the EU's emissions trading scheme. That is a priority of the UK presidency of the European Union, with a view to aviation joining the scheme by 2008 or as soon as possible after that date.

Lord Clinton-Davis: My Lords, what is the response of the Americans on emissions trading?

Lord Davies of Oldham: My Lords, that is a tougher nut to crack. We have a considerable way to go on the issue of emissions worldwide and by all airlines. I am seeking to emphasise that we are seeking to develop the European scheme more fully, to include aviation. I hope that my noble friend will recognise that that will be a very significant step forward and will increase the basis on which Europe approaches the issue of worldwide emissions.
	In addition to the environmental provisions, the Bill also contains two important measures relating to the financial protection and health of air travellers. The Government are committed to improving consumer protection for air travellers. The Bill takes a step forward by ensuring that the Air Travel Trust Fund can be replenished by contributions from the aviation industry. The Government have decided not to make an amendment to the Bill to implement the Civil Aviation Authority's recommendation for a £1 levy on all air passengers departing the UK. We believe that the attractions of the CAA scheme are outweighed by the disadvantages.
	First, the levy would be compulsory. In line with other sorts of financial protection, the Government do not believe they should compel citizens to protect themselves against the failure of an airline. Secondly, there is no logical reason why the state should organise refunds for any one particular group of consumers. The ATOL scheme has been in place since the 1970s and, alongside the European directive on package travel, was introduced specifically to protect holidaymakers from the risks involved in paying out significant sums to travel organisers many weeks, if not months, before the date of travel.
	Thirdly, although the levy would reduce the difference in protection given to package and independent travellers, it would not eliminate it altogether. There would still be a two-tier system as those who assembled their own packages would have cover for their flight but not for loss of accommodation or car hire. The Government appreciate that the package travel regulations impose costs on tour operators, which they see as an unfair competitive advantage for scheduled airlines. However, the CAA-proposed levy would replace that imbalance with another. The same £1 would purchase cover for the traveller who buys a low-cost flight to Europe for under £30 and for the traveller who has booked a two-week package in the Far East or the Caribbean. The budget traveller would pay a much higher percentage of his outlay to ensure that there is enough money in the pot to refund to the long-haul package passenger should his tour operator fail.
	The Government are committed to reducing regulatory burdens on business and to regulate only where necessary and in a light-touch manner. A levy is a heavy-handed instrument to solve the problem of informing a population that has easy access to a multitude of information sources which are increasing continually
	Passengers are also said to need special protection if they are stranded abroad. The Government realise that not all travel insurance covers insolvency. However, some insurance does. The CAA's assessment and the example of EUjet this summer showed that people generally find their way home by other routes. Of course, they may incur some expense and inconvenience, particularly if they are not insured, but it is not fair to impose a levy on all air passengers just to provide cover for that. In the case of EUjet, other airlines stepped in to help and have told the Government that they intend to learn lessons from the experience to improve the effectiveness of future voluntary rescue efforts. Similarly, when Swissair and Sabena failed, other network airlines honoured the homeward tickets of passengers abroad.
	The Government have been encouraged by airlines' assurances that they will continue to take voluntary action on repatriation. The Government will be talking further to airlines in the coming weeks to ensure that effective voluntary measures are put in place as rapidly as possible. Nevertheless, we recognise that the current bonding system for tour operators can be a barrier to market entry and can tie up capital. The Government have therefore asked the CAA to review whether the system of ATOL bonds could be replaced with a more efficient means of meeting tour operators' obligations under the package travel directive, while at the same time replenishing the Air Travel Trust Fund following the passage of the Bill.
	In 2001, in its excellent study of air travel and health, the Select Committee on Science and Technology of this House recommended that the Government should ensure that concern for passenger and crew health becomes a firm priority. In March 2003, in response to that recommendation, we announced the establishment of the Aviation Health Unit—a dedicated facility within the Civil Aviation Authority for the provision of health advice to passengers, airlines and others. The unit, which has been in operation since December 2003, is presently being funded by the Department for Transport. However, it has been the policy of successive governments that such costs should be borne by the aviation industry rather than the taxpayer. We have therefore included a clause to enable the CAA to recover the cost of the Aviation Health Unit from the industry by a suitable charging scheme. The CAA will of course consult on the most appropriate charging mechanism, but the amount of money involved is extremely small, amounting to less than half a percent of what airlines currently pay towards the cost of the Civil Aviation Authority.

Lord Clinton-Davis: My Lords, the current regulations do not extend to people who are on board the aircraft. Will the Government therefore consider amending the regulations accordingly? It is an anomaly without any justification.

Lord Davies of Oldham: My Lords, I hear what my noble friend says. He will also have the opportunity very shortly to make that point more fully in his speech, to which we all look forward. It is a point that we could discuss in Committee. However, as I think he will recognise, we have taken a considerable step forward by establishing the unit. It is only right that the Civil Aviation Authority should take responsibility for how it operates.
	Under current legislation, in the Airports Act 1986, an airport company owned by a local authority or a group of local authorities—known as a "public airport company"—or any subsidiary is prevented from engaging in activities in which none of its shareholding local authorities has the power to engage. That restriction was considered entirely appropriate at the time. However, there have been calls in recent years for the restriction to be relaxed to allow for successful public airport companies, such as the Manchester Airports Group, to develop their businesses and to serve better their local area and the wider region.
	On two occasions amendments to other Bills were tabled in this House and subsequently withdrawn, although the Government made clear their sympathy with the principles of relaxing those restrictions and clarifying the position where there is uncertainty. In June 2003, the Government—in the guise of my noble friend Lord Rooker—gave a commitment to consider the matter further with a view to bringing forward legislation when a suitable opportunity arose. This is the opportunity and we are pleased to be honouring that commitment.
	The Bill will therefore allow the Secretary of State, by regulations, to specify permitted activities which he considers to be incidental to or connected with the business of operating a commercial airport. He will be able to set conditions on the permitted activities—for example, limiting their scope to activities of a commercial nature or to activities carried out in certain countries or territories. That could include selling their expertise in airport management and development, in air traffic management, airport security, specialised airport fire and rescue services, the ground handling of aircraft, passengers and freight, as well as freeing them to enter into a wider range of joint ventures in connection with airports. Our aim is to allow public airport companies the opportunity to compete on a more level playing field, here and abroad, and I commend these measures to the House.

Baroness Tonge: My Lords, for decades people living around airports have listened to assurances from Ministers about the expansion of air travel, assurances that they will not suffer more noise or pollution and assurances that global warming will not be affected. How can the Minister have any confidence that the new measures in the Civil Aviation Bill will deliver where previous governments have not?

Lord Davies of Oldham: My Lords, I think that the noble Baroness will recognise that we are committed to operating a regime of enhanced control. It is on the basis of the effectiveness of these measures that I have confidence that that will occur. The argument that I am developing is about the freedom of airports to enter into commercial activities. That may have nothing at all to do with the issues she has raised; it will merely bring to the areas and regions of those airports the benefits of successful commercial activity, which may of course be carried out elsewhere.
	Clause 6 will revoke the role of the Secretary of State as the point of appeal in aviation route licence cases. Aviation route licensing cases concern the allocation by the Civil Aviation Authority of frequencies available to UK airlines in circumstances where restrictive bilateral aviation agreements between UK and foreign countries prevent UK airlines from mounting all the services they would like to provide.
	Airlines make proposals to the CAA about how they would use the available frequencies, and the CAA makes a decision on those proposals based on its assessment of which of them will bring the greatest benefit to consumers. The CAA gives effect to its decisions by conditioning airlines' route licences. It is currently possible for an airline to appeal to the Secretary of State against a CAA decision. That is what we are proposing to remove. Our intention is to streamline and modernise the process in the interests of consumers and the industry. The CAA is the body with the greatest expertise in assessing the consumer and competition issues on which the allocation depends, and we think it right that the CAA alone should make the necessary determinations. The current possibilities of appeal to the Secretary of State add a political dimension which is no longer appropriate now that the airline industry in the UK is a mature and competitive industry. And experience suggests that airlines automatically lodge appeals against CAA decisions as there is no incentive for them not to do so. That can delay the take-up of new services considerably and disadvantage consumers to no good purpose in many cases.
	We considered the possibility of retaining an appeal to an alternative body such as the Competition Commission but concluded that that would make the process even more time consuming and bureaucratic—and no less expensive—than it is at present without adding any real value to the assessment which is carried out by the CAA. We want consumers to enjoy the benefits of additional services with the minimum of delay consonant with a proper assessment of the relative merits of different airlines' proposals for services.
	We are confident that the CAA's processes, including a public hearing at which evidence can be examined and questioned, provide for a full and transparent assessment of the merits of the various proposals. It may be open to a disappointed applicant to seek a review of the lawfulness of the CAA's decision through the courts. We consider that this combination is sufficient to ensure that the demands of regulatory accountability are met, and to safeguard the parties' rights under the Human Rights Act. We have consulted the airlines, the CAA and the Air Transport Users Council, the consumer body. A majority of those who responded supported the reform.
	In conclusion, I consider the Bill to be positive for those who live near airports, for the traveller and for the aviation industry. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Davies of Oldham.)

Lord Hanningfield: My Lords, I welcome the opportunity to speak on this small yet highly significant—and, dare I say, contentious—Bill. It follows the Government's aviation White Paper, although, as we have just heard from the Minister, there is a hotchpotch of measures, some better than others. Sadly I do not think that the Bill has a strategic shape or clear purpose. It will be a difficult job to follow its ultimate consequences.
	The Bill gives the Secretary of State the authority to do quite a lot of things but it is not clear what he will end up doing. There are provisions on noise, emissions and ensuring against corporate failure, but there is no comprehensive policy on either noise or emissions.
	The aviation industry has seen dramatic wholesale changes in the past decade. We have witnessed a significant increase in air travel, combined with the emergence of new carriers, low ticket prices and Internet purchasing. At the same time, airports have attracted significant levels of internal investment, with BAA investing some £6 billion since privatisation. The number of passengers has risen dramatically, from 51 million in 1982 to 189 million in 2002, and by 7 million in 2001–02 alone. The Government estimate that there will be 500 million air passengers by 2030. That has a significant and substantial impact on the environment.
	Research by the Tyndall Centre for Climate Change claims that, at the present rate of growth, aviation emissions would wipe out all the emissions savings made by other sectors of the economy. It would be almost impossible for the Government to meet their stated objective of reducing CO2 emissions by 60 per cent from 1990 levels by 2050. Aviation emissions alone explain why CO2 emissions have increased since the Government came into power. Yet the Government concluded in the White Paper that there was a desperate need for additional runway capacity in the south-east. With developments at Gatwick scuppered until 2019, the burden of expansion will be placed on the other London-centric airports, particularly on a second runway at Stansted. I declare an interest: as noble Lords may know, I am leader of Essex County Council.
	Although there are no provisions in the Bill on a second runway, it was dealt with in the White Paper. Existing runway capacity in the south-east should be developed without building any further capacity. I am sure that that issue will be discussed in Committee. Nobody believes that Stansted could possibly finance out of its own revenues the hugely expensive infrastructure expansion required for a second runway. I wonder where the cash would come from for the new roads, dedicated high-speed rail line and M11 junction, not to mention all the infrastructure requirements for the growth in workforce required to operate and service a vastly expanded airport. Many of us cannot help but think that the Government's entire thinking on the future of aviation is misguided and confused. In the case of a new runway at Stansted, and possibly one at Heathrow, the market probably does not want it and environmentally it would be disastrous for all concerned. In short, the Government have a piecemeal approach to that, but they have no overall strategy, which presumably is why there is nothing about runways in the Bill. The Bill is a case in point: it is neither one thing nor the other. It clearly illustrates the confusion on those issues, which we will explore further in Committee.
	As regards some of the specifics in the Bill, I shall turn, first, to noise. We know that airports have had the power to fix their charges with reference to noise since the Aviation Act 1982. But for the resident on the ground the current methodology for the measurement of noise is highly unsatisfactory. While noise is measured in decibels, the equivalent continuous sound level is an index of exposure to aircraft. It is a measure of the equivalent continuous sound level averaged over a 16 hour day from 7 am to 11 pm, and can be taken in the peak summer months from mid-June to mid-September.
	The continuous level system underestimates aircraft noise in three key areas. First, averaging out the noise can be misleading; secondly, low frequency noise is ignored; thirdly, continuous level classifications underestimate the level at which noise annoys people. In short, decibels are an unsatisfactory measure of nuisance. It is the drone and roar of aircraft that disturb people. The entire methodology desperately needs an urgent review. I should be grateful if the Minister could give us some indication of whether the Government are entirely content with the existing regime or whether there are any thoughts on conducting a review into noise.
	Clause 2(2) empowers the Secretary of State to discontinue applying limits to the number of night aircraft movements at Heathrow, Gatwick and Stansted and to replace them with noise quotas alone. The current position is that a movements limit and a noise quota apply to night operations. A night noise quota alone would produce a lesser standard of protection because, as I have tried to explain, the present methodology of monitoring noise is decidedly unsatisfactory. In addition, as aircraft become less noisy more flights could be accommodated within the same noise quota and there would be no real benefit to the local community. Again, as I have already mentioned, there is no such thing as a quiet aircraft: there is noise from all aircraft. Virtually all night flights disturb the peace. Therefore, it is important to retain the limits on the number of night flights as well as the aggregate noise output.
	During the Second Reading debate in the other place, the Parliamentary Under-Secretary gave an assurance that the Government would consult stakeholders before making any changes to the current arrangements. However, I cannot help but think that this is a Government merely going through the motions. On this issue, they seem to have made up their mind. I should like the Minister to comment further on that.
	The Under-Secretary additionally gave an assurance that night movement limits at the three London airports would remain in place until at least October 2012. However, if Clause 2(2) remains as presently drafted, the Secretary of State could commence consultation immediately after Royal Assent. It would be possible for night movement limits to be abolished as early as October 2006. Therefore, we need to amend that part of the legislation. It is thoroughly disingenuous for the Government to try to portray that as offering greater protection for local communities by encouraging the use of quieter aircraft through noise quotas. I give notice that we will seek during the passage of the Bill to remove that relaxation in regard to restricting night flights.
	Airport operators are responsible for monitoring and reporting on the environmental impact of their operations—acting as judge, jury and policeman. In addition, at all UK airports, except Heathrow, Gatwick and Stansted, the airport operator is responsible for deciding which environmental noise objectives should be adopted. There is considerable mistrust among local communities in relation to the fairness, objectivity and transparency of the current in-house arrangements for reporting on aircraft noise, emissions and track keeping, and for recording and handling complaints from members of the public regarding aircraft noise and other environmental impacts.
	Instead, would it not be preferable for an independent body such as the CAA or even the trading standards departments of local authorities to take on this role thereby restoring trust, confidence and integrity back into the process? Indeed, the CAA is perfectly capable of taking on this role and Section 5 of the 1982 Act empowers the Secretary of State to require the CAA to exercise the role of environmental watchdog. The resource implications could be minimised if the CAA were simply charged with overseeing the monitoring and reporting of environmental impacts at airports and, of course, it already has the necessary expertise as well as a reputation for fairness and integrity.
	Another area of concern in the Bill is the powers that it gives to airport operators to fine an aircraft operator who breaches any noise abatement requirements imposed by the Secretary of State. We found it odd that the Bill then allows the manager of an airport to spend those,
	"penalties for purposes which appear to him to be likely to be of benefit to persons who live in the area in which the aerodrome is situated".
	That gives the manager of the airport the discretion to spend that money. He could have a passion for golf and might build a golf course in the vicinity of the airport. That could happen because of the way in which the Bill is currently drafted. How would that benefit the people in the vicinity of the airport? I would welcome an explanation from the Minister about the circumstances in which the fines could be spent.
	The other main issue in the Bill is emissions. In principle, the idea of allowing airports to take into consideration aircraft emissions when levying landing charges is reasonable. However, the Bill simply allows emissions conditions to be included in contracts; it does not determine on what basis they should be included. Whether airport operators are necessarily the best people to possess this duty and how it will work in practice are points on which we will want to probe the Government in Committee.
	There are several other matters in the Bill that the Minister mentioned which I will not go into today but which we will explore in Committee. In conclusion, we feel that this is a rag bag of a Bill that lacks overall strategic direction. It has missed an opportunity. Many of its measures are questionable in their benefit to the ordinary user of air travel.

Lord Clinton-Davis: My Lords, the noble Lord is being very prolific in his criticism of the Bill, but he has not uttered one word of what the Official Opposition would like. Can we have the benefit of that now?

Lord Hanningfield: My Lords, in reply to the noble Lord, I have mentioned several issues—the policing of noise, for example, should be done by the CAA or trading standards. We will be tabling amendments during the course of the Bill to see stronger regulation on emissions and noise. We will also be tabling amendments to clarify the Government's policy on the long-term future of airports. During that time, I shall be expanding on Conservative policy on this matter and by that time we will have a new leader and I shall be able to consult him about our policies.
	As I said, many of the policies in the Bill are questionable and I want to speak for the ordinary user of air travel. However, during the course of the proceedings on the Bill we must consider—as was mentioned in an earlier intervention—the residents who have the misfortune to live on the flight path or very near airports. As ever, we on these Benches will try to improve the Bill as it passes through your Lordships' House.

Lord Bradshaw: My Lords, I accept that this is a limited Bill and not one that sets out the Government's policy on civil aviation—it simply seeks to tidy up a few loose ends. One would assume—and perhaps the Minister will confirm this—that in due course we will be presented with something fairly substantial by way of government policy. However, it is useful that we mark down now the things that we will want to see in that policy when it comes to fruition. The noble Lord, Lord Hanningfield, mentioned noise limits and we are also worried by the fact that a noise quota may replace the noise number. The number of aircraft that are allowed to land at night can be counted fairly easily by people.
	If we get into a noise quota, we are then getting into the subjective area of how much noise each aircraft makes. I would hope, in any event, that whatever obligations the Government might have to the International Civil Aviation Authority or whomever we can still discriminate in favour of quieter aircraft. That is what people want. I am rather concerned about track keeping. I am concerned in two ways. First, there are few areas in this country that qualify for the description of tranquil areas. The maps are published by the CPRE and are in various colours, but fewer and fewer areas are not noisy. I would seek assurances from the Minister that the people who are responsible for routeing aircraft, whether in NATS or the CAA, when drawing up the aircraft routeing, will both prescribe the exact route that the aircraft will follow—so that they do not wander about and cause disturbance in tranquil areas—and also closely monitor the track keeping—the route that the aircraft takes on approaching and leaving an airport.
	I am not reassured by a piece of paper which has come into my possession from Manchester, saying, in respect of one of the airports—Manchester—that it has no legal powers to fine off-track aircraft. It has achieved an impressive 95 per cent compliance without resorting to financial penalties. I hope that there really will be financial penalties and that these will be invoked if people stray from the paths that they agreed to follow. There is not much evidence that aircraft operators are actually being fined.
	I want to draw the Minister's attention to one point that I find very worrying. That is the reference to decibels. The noble Lord, Lord Hanningfield, referred to them in his speech. I quote from the Manchester arrangements, where the predefined noise level is 92 decibels during the day and 85 at night. The fine for breaching it is currently £500, which does not seem very much, and £150 per decibel thereafter. If anyone knows anything about physics, a decibel is a logarithmic scale. That means if you go up from 85 to 92 decibels, you have pretty well doubled the noise level. The fine is £150 a decibel. The fine should be logarithmic as well, if it is bear down on the noisiest aircraft. It is a clear error in the Bill, or in the arrangements rather, as it is not specified in the Bill. I think that people who are subjected to very noisy aircraft really expect the operators of those aircraft to be very heavily hit, because the business is not poor and it can afford the technology to be quiet.
	Another issue I want to raise—it was not raised by the noble Lord, Lord Hanningfield—concerns the EU emissions trading scheme. The trading scheme, as far as I know, depends on aircraft operators being allowed to continue to emit greenhouse gases provided they buy licences from somebody else—let us say, someone who is running a steel works in Czechoslovakia. So, the steel works in Czechoslovakia emits less and the aircraft here burn more. I believe that that is how it works.
	It seems to me there is a perverse incentive here—that someone in Czechoslovakia may have an incentive to keep a rotten old steelworks tottering along in order that he can sell the permit to an aircraft manufacturer here when logic would demand that the rotten old steelworks or coal plant or whatever should be closed down. But if you introduce into the balance sheet of that enterprise abroad the revenue from the aircraft permits here, it will be kept going. That does not seem to me to be very environmentally friendly . I hope that the Minister will address that matter.
	Otherwise, the Bill contains a number of very welcome additions. I support what the Minister said about health and the Air Travel Trust. I also support what he said about public airport companies. I see no reason why Manchester Airport cannot sell its services on the open market if they are produced competitively. However, I endorse some of the reservations expressed by the noble Lord, Lord Hanningfield. We on these Benches shall be very sceptical about plans to expand Stansted or any other airport unless they are accompanied by very thorough noise reduction and pollution reduction measures. We are worried about whether airports themselves should be the final arbiters in such matters as track keeping and noise. The CAA is independent and is seen to be independent. However, the material that the airports publish refers to the money which they put into the local community trust fund. That is probably welcome but it may cover up the fact that they are not really doing their job properly.
	Finally, one of the matters that gives me great cause for concern is the amount of energy which airports absorb at ground level. The surface access to airports, people driving to and fro, the heating, the lighting, the services at airports and the vehicles that the airport companies use constitute at least half the pollution which is associated with air travel. When further proposals are put forward I should like to see a real clampdown in that area as the scope for making savings there is probably much greater than it is with the aircraft themselves.

The Countess of Mar: My Lords, in many ways I feel fortunate in that the appearance of this Bill at this stage will, I hope, save me from tabling numerous Questions relating to the health and safety of air crew and passengers flying in British aircraft. I do not believe that I need to remind the Minister or other noble Lords of my track record in relation to ill health resulting from exposure to toxic chemicals.
	Under Clause 7 of this Bill, the Secretary of State is,
	"charged with the general duty of organising, carrying out and encouraging measures for safeguarding the health of persons on board aircraft".
	The Civil Aviation Authority—the CAA—is required to,
	"provide advice and assistance in connection with any function".
	Noble Lords might be relieved to hear that I propose to confine my comments to this clause alone.
	I have recently tabled several Written Questions relating to flight safety and passenger and crew health on commercial aircraft during contaminated air events. A "contaminated air event" occurs when the air supply provided to the passenger cabin and cockpit, which should be clean air, becomes contaminated with pyrolised engine oils or hydraulic fluids. One of the contaminants is an organophosphate known as TCP, hence my interest in this subject. Contaminated air events, which do not occur on all flights, appear to have caused pilots to become incapacitated or partially incapacitated. I wonder whether noble Lords are as surprised as I was to learn that the air supply to the cabin and cockpit, known as "bleed air" because it is bled off the engines, is not filtered in any way. Consequently, if that air becomes contaminated, passengers and crew inhale the contaminants. Even more surprising is the fact that commercial aircraft are not required to have contaminated air detection systems. Passenger safety depends entirely on pilots to take action if they suspect the air to be contaminated. A pilot's sense of smell is not checked in their medical examinations, and some contaminants such as carbon monoxide have no smell. Is it really safe to rely on a pilot who may be suffering the early effects of chemical poisoning to respond correctly to an incident?
	The more deeply I have inquired into the issues the more interesting they become. As long ago as 1977, a 34 year-old navigator on a US Air National Guard Lockheed Hercules was incapacitated. A paper was written by the senior medical doctor for the National Air Guard, Dr Wier, who had treated the navigator. He clearly realised that the navigator had been exposed to and was suffering from the effects of contaminated air. In his paper, he stated that further investigation into the potential hazards from inhalation of synthetic oil fumes was definitely warranted. Some 28 years later, on 10 October 2005, just a few weeks ago, a British airline captain collapsed and vomited on the apron of Aberdeen airport following a similar exposure.
	While we are told that contaminated air events occur rarely—once in every 22,000 flights was the figure given in a Written Answer in 2000—that figure differs significantly from what the British Air Line Pilots Association reports. For example, in 2002, BALPA published the results of a survey of 105 responding pilots who experienced 1,600 contaminated air events in Boeing 757s, yet the CAA had less than 100 events on its database. That discrepancy alarms me. Apparent under-reporting on this scale should be a matter for concern, yet the Minister assured me in a Written Answer last week that,
	"since all UK aircrew take aviation safety very seriously, there is no reason to believe that they would deliberately under-report occurrences involving impairment".—[Official Report, 25/10/05; col. WA 168.]
	Of course air crew take aviation safety seriously. Unless they are kamikaze pilots, they want to get to their destination as much as their passengers do. Under-reporting is a serious issue that should be investigated. I understand that BALPA asked the CAA to carry out a joint campaign to encourage crews to report all contaminated air events, but the authority declined. Additionally, according to BALPA, despite being asked to, the CAA has never contacted crews or their medical practitioners after contaminated air events to understand better the effects of exposures.
	I also understand that BALPA advised the CAA that TCP had been detected in commercial jet aircraft and that its members frequently recorded elevated levels of carbon monoxide. I wonder just why it is that the CAA declines to support seemingly sensible initiatives or follow up reports that concern passenger and crew health. Some conspiracy theorists apparently say that it is a well-known fact that the aircraft with the highest number of reported events per aircraft manufactured is British-made—the BAe 146. Others may suggest that it is simply because the CAA is totally funded by the industry, so the hand that feeds should not be bitten.
	In 2000, the CAA chief medical officer suspended a BAe 146 pilot's medical certificate based upon the opinion of a neurophysiologist that the pilot was,
	"probably suffering some sort of chemical exposure on a BAe 146",
	and was, therefore, a threat to flight safety. In a Written Answer to Paul Tyler MP—now the noble Lord, Lord Tyler—the Minister stated that the CAA was,
	"not aware of any adverse long term health effects in flight crew that can be traced back to the cabin environment".—[Official Report, Commons, 9/2/04; col. 1234W.]
	The pilot is still grounded.
	Following the contaminated air conference in April 2005, the Aviation Health Working Group stated:
	"Representatives of the Department of Transport and the Department of Health attended the recent international conference on contaminated air, but no new evidence on the presence or effect of low levels of organophosphates in aircraft cabins was presented".
	I understand that, in fact, such evidence was presented. OPs were detected in the cabins of Boeing 757 and BAe 146 aircraft, and almost 20 doctors and scientists presented new papers with ground-breaking data.
	Despite publishing a paper in 2004 which indicated that air quality was within exposure limits, the sampling was never done during a contaminated air event. There appears to have been no attempt by the CAA to assess the long-term effects. Both the Australian and United States' aviation administrations clearly take matters much more seriously than does the CAA. They have spent a lot of money investigating problems, and there is a current investigation by the USA.
	While I recognise that cabin and cockpit air quality is only a factor in the health and safety concerns to be addressed in Clause 7, it is a vital factor. There is some evidence that the CAA is somewhat reticent about carrying out its duty to protect air crews and the public from contaminated air events by not taking them as seriously as it should. It is our duty to ensure that such a situation should not be allowed to continue, and if I am not assured that this new clause will allay my concerns, I am prepared to bring forward amendments in Committee and at later stages of the Bill.

Lord Faulkner of Worcester: My Lords, this Bill gives us the opportunity to debate a wide range of issues concerned with aviation. The fascinating speech we have just heard from the noble Countess is one such, which I am sure we will come back to at Committee. I will concentrate on three issues: the first is the protection of air travellers, which I will refer to last; the second is the Bill's proposals on noise and night flights; and the third, which I shall deal with first and which is perhaps the most important of all, is climate change.
	The noble Lord, Lord Hanningfield, made a remarkable speech. I agreed entirely with his words on climate change, and am particularly pleased that he quoted the research from the Tyndall Centre, and drew the conclusion that we have to do something about emissions if we are to have any chance of meeting our 2050 targets of reducing CO2 emissions by 60 per cent. Perhaps my noble friend Lord Clinton-Davis was a little unkind in asking him to commit himself to Conservative policy, but can I tease from him an admission that the logic of what he said is that the only way one can have any chance of meeting those climate change targets is by checking the growth of air travel and reducing the demand for it? I take exception with the Government, this Bill and the aviation White Paper because it contains no provision whatever for restricting the growth of air travel.
	Climate change is the most pressing environment issue facing us. In a speech in September last year, the Prime Minister described it as,
	"a challenge so far-reaching in its impact and irreversible in its destructive power, that it alters radically human existence".
	Shortly afterwards, our own Sub-Committee D of the European Union Select Committee, under the chairmanship of the noble Lord, Lord Renton of Mount Harry, published an excellent report on climate change. Launching it, the noble Lord said:
	"The stark truth is that this is a global problem which unsolved is likely to produce truly catastrophic effects. Only sustained global action will provide a solution.
	"Individuals need to change their behaviour. The EU can lead by example but the impetus must be on citizens to consider how they can contribute to global warming—and make changes".
	As we have heard, aviation is the fastest growing source of climate changing emissions, and that is where we must start.
	It is a pity that the aviation White Paper instead of addressing the climate change issues chose to promote growth in air travel, and sought additional runway capacity in the south east, starting—as we heard—with Stansted by 2013. I suspect my noble friend Lady McIntosh of Hudnall will say more about Stansted, and I do not want to steal her thunder. However, it is worth remembering that Stansted is not fully utilised now, has no intercontinental traffic, and 90 per cent of its flights are operated by easyJet and Ryanair. We heard some examples of how Ryanair treats its disabled passengers at Questions yesterday. Most of us are rather tired of Mr O'Leary's dismissive attitude to any suggestions that his airline should behave like a responsible corporate citizen.
	I turn to the issue of noise and nuisance. I trust that my noble friend will have some answers to the points made by the London Borough of Hounslow and the other local authorities under the Heathrow flight paths. They make the point that the Bill appears to remove the limit on the number of takeoffs and landings at Heathrow, and weakens the controls on aircraft movements during the current night quota period. They fear that Clause 2(2) would end the existing aircraft movement limits by replacing, in Section 78 of the Civil Aviation Act 1982,
	"limit the number of occasions on which they may take off or land",
	with,
	"impose limits or other restrictions relating to aircraft taking off or landing".
	Given the known lobbying skills of the aviation industry, one can easily envisage a time when it would argue that the introduction of quieter aircraft meant that it had reduced the nuisance caused by noise to such an extent that the night flying restrictions could go altogether. Some persuasive briefing has been issued by the HACAN ClearSkies campaign, the voluntary organisation that campaigns on behalf of residents around Heathrow affected by the flight paths. It makes the point that existing ways of measuring aircraft noise are unsatisfactory. Again, I agreed with what the noble Lord, Lord Hanningfield, said about that. It is the frequency of noise events that wrecks a good night's sleep, not the fact that the event itself might be slightly less noisy. If I am unable to sleep through noise events greater than 90 decibels, it will not make any difference if what wakes me up is measured at 92 rather than 98 decibels. Less noisy does not mean not noisy at all. What makes a difference to my sleep and that of other people who live under the flight paths is the number of times in a night that noise occurs, which is why the numbers limit on night-time movements must be retained.
	My final point is a matter that most people in the travel industry hoped and expected to see in the Bill, but that has been excluded from it. I listened carefully to what the Minister said about the matter. I refer to the proposal from the Civil Aviation Authority that a £1 levy be imposed on all outbound air passengers from the UK to fund a new scheme that would provide protection for all air travellers who have the misfortune to be stranded abroad through the collapse of an airline or tour operator. That would replace the existing air travel organisers licensing bonds—the ATOL bonds—which the CAA has run for the past 30 years, and provide comprehensive consumer protection for everyone.
	Perhaps my noble friend did not address sufficiently the fact that the travel industry has changed dramatically in the past few years, and legislation has not kept up with those changes. Not so long ago, close to 100 per cent of consumers enjoyed financial protection when booking travel because they went with tour operators. Now, with the advent of no-frills airlines and websites, barely half of them enjoy financial protection, although most of them think that they do. Thirty years of the ATOL system has led consumers to believe that, when they buy a scheduled airline ticket, they will be protected if something goes wrong, but that is not now the case. Consumers also believe that if they book accommodation, car hire and other ancillaries from an airline website, they will be protected if things go wrong. Again, that is no longer the case.
	The situation that I describe affects others as well. The traditional tour-operating industry is strictly regulated by the EU package travel regulations of 1992. Traditional tour operators have their cash tied up in bonds to protect consumers, have many onerous responsibilities to their customers, have to pay VAT on their margins and are forced to spend hundreds of hours of management time on administration in connection with bonds. None of those responsibilities or costs applies to the airlines or web-based companies that now compete head to head with the traditional tour-operating industry. The £1 levy—or something similar—would provide the opportunity to level the playing field between traditional tour operators and the airlines, which now increasingly behave as if they are tour operators, but without having the same legislative burden.

Lord Russell-Johnston: My Lords, has the noble Lord's attention been drawn to the recent case in which the insurance ombudsman found against Thomas Cook, which had resisted supporting the payment of insurance to a girl who had had her leg amputated three years ago? The problems being outlined are not confined to the recent-entry companies to the holiday industry.

Lord Faulkner of Worcester: My Lords, I am grateful to the noble Lord, whose point reinforces my argument. I agree that it spreads it wider.
	On Third Reading of the Bill in another place on 10 October, the junior Minister Karen Buck said, as my noble friend did today, that the Government had decided not to accept the CAA's advice, and that the public should have the right to decide whether or not to buy insurance to protect themselves financially. The Minister said that an across-the-board levy of £1 was "disproportionate".
	I urge my noble friend to reconsider the matter. Members of the public who buy holiday packages already pay for their protection. They have no choice because the tour operators are obliged to include such cover in their holiday prices. The Government said that it would help consumers to learn more about air travel insurance, but they seem to have overlooked the fact that such insurance costs a lot more than £1. In addition, that insurance does not arrange repatriation for those who are stranded abroad.
	The most recent airline to go bust is EU Jet, to which my noble friend referred, which used to fly out of Manston in Kent. It collapsed in July at the height of the holiday season, leaving 12,000 tourists abroad and another 27,000 people waiting to travel. The CAA in its report of the collapse said:
	"If a managed scheme with a central administrator was in place, repatriation could have been arranged more cheaply, at no cost to passengers, and they would have been able to travel as intended with little or no disruption to their holiday and therefore less anxiety. Passengers yet to travel would also receive a refund irrespective of whether they paid by credit card or debit card".
	EU Jet was one of 18 scheduled airlines in Europe that have collapsed in the past four years. It will not be the last because there is still overcapacity in the airline market. More consumers who believed themselves to be protected will have their holidays ruined when more airlines collapse, and they will incur costs that they have not budgeted for.
	I hope that we can come back to the subject in Committee, and that even if the £1 levy is not acceptable to the Government, we can consider an alternative way of providing the same sort of protection to customers as the tour operators. I hope that we will have the chance to discuss those matters, and the matter to which the noble Countess, Lady Mar, referred to. I look forward to the later stages of the Bill.

Baroness Flather: My Lords, I shall start by picking up the points made by the noble Lord at the end of his speech. He commended the Bill to the House by saying that it was positive for the airlines, consumers and residents. I am sorry but that is not how the residents around Heathrow airport perceive it.
	That point has been made by the noble Lord, Lord Faulkner, on behalf of Hounslow, but does the Minister realise that 12 local authorities are affected by the noise levels and flight paths around Heathrow? They are all extremely concerned about Clause 2, which amends Section 78(3) of the Civil Aviation Act.
	I am a resident and former councillor of the Royal Borough of Windsor and Maidenhead. I am sure that today, if other Peers lived in the boroughs surrounding Heathrow, they would all speak on this. It is of the deepest concern to the residents and to the local authorities that the Secretary of State will have the flexibility, the discretion and the power to introduce night flights on the basis of noise alone. I cannot put it better than the noble Lord, Lord Bradshaw, and my noble friend Lord Hanningfield.
	One point that has not yet been made is that it does not matter how low aircraft noise is at night as at night time we can hear the smallest noise; we can hear a car on the road that we do not notice in the daytime. The noble Lord, Lord Faulkner, touched on this matter. He said that a little less noise will not make a difference. I emphasise that night-time is a very quiet time and almost any level of noise—the noise-free aircraft has not yet been invented—will keep the residents near and around the airport awake at night. Many lives have already been blighted. There are many examples of how flight paths have been chosen; the noble Lord, Lord Bradshaw, mentioned how flight paths are changed and organised so that they blight people living under them.
	I want to provide the House with an example. On 14 October this year, there were 649 movements in a 24-hour period from Heathrow, during easterly operations, when aircraft were landing over Windsor. During that week there were seven days of continuous easterly operations, providing little or no respite for local residents, except for about three or four hours during the night. Noble Lords who have been in Windsor during the day will know that one has to stop talking, even in enclosed places, when planes fly over. If that is to happen at night, the residents of the royal borough will certainly not have very much sleep.
	The local authorities took the Secretary of State to judicial review in 1993—that was under the present regime. I do not know whether anyone has noticed, but Clause 2(2) takes away from local authorities the right of judicial review as regards limits so that they will not be able to question the Secretary of State via a judicial review because it will no longer be ultra vires. That is another very deep concern. As has been stated by Karen Buck, the Parliamentary Under-Secretary of State for transport in another place, nothing will happen until 2012. One noble Lord has already said that there have been many broken promises and if noble Lords were to read Commons Hansard they will see lists of broken promises. There is no guarantee for people to ensure what goes on because in the end the legislation says that the Secretary of State can change the situation if he thinks fit by one means or another.
	I am an inveterate traveller and I have been using Heathrow the whole of my life. I would like nothing better than to fly at night because that would make it easier to get flights and we may not have to arrive in another country in the middle of the night. We always leave here in the daytime, but arrive at our destination at night. I believe that it is worth the sacrifice for the sake of all residents, who need at least some hours of peace at night. I would be sad to see that amendment go through, and will strongly support the amendments that will be put forward from this side of the House.

Baroness McIntosh of Hudnall: My Lords, my noble friend the Minister is the most courteous and charming of men. Even he, however, must have groaned inwardly—I suspect possibly even audibly—when he saw some of the names on the speakers' list for this debate. He will have been well aware of the axes that were about to be ground in his presence, and has heard most of them ground already. I fear they will go on being ground throughout the passage of this Bill, because there is, quite obviously, mounting concern across all parties and the country about the impact of aviation on our environment and quality of life. Much as I should like to brighten the Minister's day by greeting this Bill with glad cries, he will not be surprised to learn that I am not going to. I can promise him, however, that I will not go on at great length because I only have two points to raise, which have already been raised by others.
	I am indebted to the Stop Stansted Expansion campaign, which has provided excellent briefing on the Bill. However, I can also add personal testimony to the general arguments that they have brought to my attention. I live on the patch of the noble Lord, Lord Hanningfield, in Uttlesford. If Uttlesford does not mean much to your Lordships, it is a beautiful part of rural north Essex, often cited as one of the best places to live in the UK. I can testify to that.
	Uttlesford district has within it a number of historically important buildings and settlements, including the towns of Saffron Walden and Great Dunmow, and the famous villages of Finchingfield and Thaxted, where I live. These are not, however, mere heritage showpieces preserved in architectural aspic for the benefit of tourists and inhabited by part-timers in green wellies driving 4x4s. They are living and breathing, with shops, pubs, schools, hospitals and many thriving small businesses, together with the usual range of problems which go with being a dynamic community. Sleepy they are not. The reasons for their wide-awake state, however, are not all good. They are all within 15 miles of Stansted, and some of them, like my own village, are directly under the approach path into the airport. The issue of aircraft noise, and night flights in particular, is therefore of acute importance, as a number of noble Lords have already pointed out, not only to the people who live near Stansted, but to everybody who lives or works near any airport.
	As my noble friend the Minister and others have noted, Clause 2(2) of the Bill amends Section 78(3)(b) of the Civil Aviation Act 1982 in such a way as to empower the Secretary of State to discontinue applying limits to the number of night aircraft movements at Gatwick, Heathrow and Stansted, replacing them with noise quotas alone. Under current law, there is both a movements limit and a noise quota applied to night operations, providing a complementary set of protections for local communities.
	The Government appear to believe that the number of movements can be allowed to increase because aircraft are becoming less noisy. We have already heard from a number of your Lordships that that is not conspicuously true, and I can assure your Lordships that even the most modern aircraft can be pretty noisy when it is right over your head in the middle of the night. Even if it were true, however, any benefit we might gain from the development of quieter engines would be lost if the numbers of flights were unrestricted. All night flights disturb, as my noble friend Lord Faulkner of Worcester graphically pointed out. They are particularly disturbing, oddly enough, in rural areas, where the general level of ambient noise at night is low. We must retain limits on their numbers, as well as on aggregate noise output. Furthermore, a movements limit is far easier to understand and monitor than noise quota limits, as the noble Lord, Lord Bradshaw—who I see is no longer in his place—noted. It provides vital protection to those who live very near an airport, although not necessarily directly under a flight path, and are especially disturbed by ground noise at night—another issue which has come up during this debate. Will my noble friend consider—I know what the answer will be—either deleting Clause 2(2) from the Bill or alternatively amending it so that movement limits remain in place?
	It is only fair to say that my noble friend has given the House an assurance today that night movement limits at Heathrow, Gatwick and Stansted will remain in place at least until October 2012 and that assurance is welcome. But under the arrangements proposed in the Bill as it stands, the Secretary of State could begin a public consultation immediately, as the noble Lord, Lord Hanningfield, has pointed out. An assurance was given that the Secretary of State had no intention of using Clause 2(2) to abolish local airport limits on daytime aircraft movements, but this Bill would provide the Secretary of State with statutory authority to do just that. Could my noble friend say why, if the Government do not intend these powers to be used, they are included in the Bill? Alternatively, could he say how the assurance given by himself and his honourable friend in another place are to be incorporated into the Bill so as to prevent it being used in ways the Government do not intend?
	Finally, I draw my noble friend's attention again to the fact that the prevailing system of independent monitoring of the environmental impacts of air traffic, currently the responsibility of the owners and operators of airports themselves, are viewed with deep suspicion and mistrust by communities in the vicinity of airports, who believe that their fairness, transparency and objectivity cannot be relied upon. The Bill presents an opportunity for the 1982 Act to be amended to give the CAA the responsibility to act as regulator and overseer of environmental standards, as the noble Lords, Lord Hanningfield and Lord Bradshaw, noted. I know that there have been issues about the resource implications of such a change and I cannot believe that these would be impossible to overcome. Are the Government prepared to consider this matter again?
	I am aware of the importance of air transport to the economy of this country and I am not so na-ve as to imagine that the benefits it brings can be secured at zero cost to local communities and to the environment, despite my profound personal wish that individuals and governments would wake up fast, as my noble friend Lord Faulkner has suggested they should, to the frightening long-term implications of our love affair with cheap flights and out-of-season asparagus. There is a limit, however, to what people should be expected to tolerate by way of disruption to their daily lives and their nightly rest in the name of economic growth.
	As it stands, this Bill does nothing to rebalance that equation—indeed, it has the potential to make matters worse. When my noble friend comes to reply, I hope that he will be able to allay some of our worst fears.

Lord Clinton-Davis: My Lords, first, I must declare several interests. At present, I am president of BALPA and have been so since about 1980. I have also been a Minister for aviation and the European Commissioner for transport and the environment. In all those positions, the most important feature is balance. We have not heard that spoken of today. The noble Lord, Lord Hanningfield, said that the Bill represented a confused approach—and he nods—but that applies to every civil aviation Bill and it cannot be otherwise. I go back a long way to when I entered the House in 1970 and I cannot think of a situation where a civil aviation Bill has been other than that.
	My noble friend was right to emphasise the contribution which the airline industry makes to the economy. It is often insufficiently appreciated in terms of the generation of wealth and employment, both direct and indirect, and of benefits to the public in enhanced leisure and business opportunities.
	On the other hand, while recognising those immense benefits we cannot ignore or neglect the environmental impact. Therefore, as I said at the beginning, it is vital that we strike a balance between the real problems confronting those on the ground and the aircraft industry. If we take noise, for example, while there is no doubt that today's jets are less noisy than their predecessors, those living under or near flight paths still suffer. As we have heard from various speakers, they are kept awake at night and disturbed by day. It is of little comfort to them to be informed that the situation was even worse in the past and they rightly call for more action. There is a vital need for ongoing research to develop still quieter aircraft using designated and non-designated airports alike.
	So it is a question of balance, which the Bill seeks to achieve. There has to be a sensible environmental policy to protect people, coupled with the reasonable assurance that airlines can continue to operate from our national airports and not for some to be tempted to desert them in favour of a new home—or perhaps mirage would be a more accurate term—on the Continent.
	This Bill encompasses proposals to deal with salient environmental concerns with regard to noise and other forms of pollution. It brings in reasonable regulations to control other aspects of the industry providing for appropriate penalties where breaches occur. Local authorities and local communities have important roles in encouraging best practice and consultation in my view is the key.
	Airports' residential neighbours, airport workers, suppliers of services and trade unions should all be involved and given a hearing. Out of that—I hope—constructive dialogue, conflict and tension may be reduced and new beneficial effects emerge. In this spirit, a memorandum of understanding was signed last March between the Civil Aviation Authority and the Health and Safety Executive. Under it, both bodies are committed to close co-operation and a guidance on good practice was drawn up. Unfortunately, the guidance to consult with employees does not extend to the CAA's responsibility for the health and safety of crews when they are on the aircraft—a point I tried to make in an intervention on my noble friend.
	There are work at height regulations in force but they do not include some matters of crucial concern related to flying conditions. Therefore, pilots are seeking an extension of this guidance so that their expertise and professionalism can be drawn on to advise on occupational health and safety matters, such as cockpit design, ergonomic operations, training of crews in identifying hazards—for example, contaminated cabin air—and so on. Therefore, they believe that the guidance should include an imperative to consult about onboard issues as well as those external to the aircraft. That would also be welcomed by the operators. Pilots' contributions, borne out of experience, could undoubtedly benefit crews and passengers alike. Therefore, while pilots broadly support the Bill, an amendment introduced in Committee into Clause 7 on health and safety to address the anomaly to which I have alluded would be worth while.
	I refer to this now to pray in aid the necessity of close consultation and co-operation, above all with the industry's employees, but not confined to them. This matter is a question of health on board, but by addressing all concerns in a meaningful way, we can improve the health of the airline industry as a whole.
	The Government have endeavoured to foresee the possibilities of sustainable aviation up to 2030 in the White Paper introduced by them, The Future of Air Transport. The Government cannot anticipate all the problems but, in my view, they have done their level best. Subject to what I said and to planning permission, plans have been set out for all the airports including a second runway at Stansted by 2012; perhaps a third runway at Heathrow; maybe a new runway at Gatwick after 2019; a second runway at Edinburgh; and the development of Manchester, Glasgow and other regional airports. All these plans are vitally important but consultation is vital in every respect.
	There are three other matters that, although they are, understandably, not specifically mentioned in the Bill, are highly germane to it. The first is purely British. Today it was announced by BAA that there is to be a large number of redundancies at London airports. Can my noble friend enlarge on that? When will they take effect? Who will be the probable victims? What effect will they have on British aviation? What consultation is likely to take place with the people who are going to be affected or their trade union representatives?
	Then there are the issues of climate change and global warming. The United States, in particular, is being somewhat cavalier about the threats that are posed thereby. It has been joined by a few other countries. They all display selfishness and myopia in an extreme degree. We have obligations under the European Convention on Human Rights that are of huge importance to millions, nay, billions, of people. The Government propose to tackle these issues on the world stage. Therefore, I hope that my noble friend will be able to enlarge on this in his closing remarks. Precisely how will the Government go about this? In particular, how do they envisage that the issue of emission trading, with its acknowledged opportunities, will be dealt with?
	This is a sensible Bill. I hope that it will be possible to bridge the differences which have been voiced in the House and, more particularly, by the organisations outside. I hope also that we will be able to amend Bill if changing circumstances demand this. But all in all the Government should be proud of what they have done and I fully support the Bill.

Lord Berkeley: My Lords, I declare an interest as chairman of the Aviation Environment Federation. As noble Lords have said, there are some good elements in the Bill. I was interested to hear the Minister talk about aviation being a gateway to the world and that it produces wonderful travel opportunities. That is an extension of the Government's long-held view that they should predict and produce for the needs of air passengers and freight while not doing the same for road, rail or any other surface mode. Maritime does not come into it because we have not yet had a strategy on that. I worry, as other noble Lords have said, that we continue to pay lip service to the problem of emissions and Kyoto, but with the terrible proviso—so long as it does not hurt anybody and does not cause anybody to change his behaviour. As my noble friend Lord Faulkner said, I am afraid that in order to do good it will have to probably hurt and cause a behavioural change.
	I am a member of the European Energy and Transport Forum. Earlier this year it produced a report on taxation of aviation. Emissions trading came into that report. It said:
	"The scope of any [emissions trading] scheme must include all flights to and from EU airports, but domestic and external, as well as flights over EU airspace. If emissions trading rather than a fuel tax is chosen as the preferred route, this can only be achieved by severely limiting the free 'allowances' allowed to airlines at the start of the scheme".
	I suspect—the noble Lord, Lord Bradshaw, alluded to this—airlines are very keen on emissions trading because they will get this free start. So, any trading will probably only affect any increase in the traffic that they create. I do not think that is its objective. The Energy and Transport Forum concluded that in order to be effective for air to pay the full cost of the damage it imposes, there should be a charge of something like £50 per 1,000 kilometres passenger journey or about £200 per 1,000 tonne kilometres of freight.
	So the emissions trading scheme needs to be taken forward but the free ride to start off with is not an option; and, I am afraid, if we are to meet our Kyoto targets, as other noble Lords have said, this must hurt. If it causes some passengers and some freight—and I declare an interest as chairman of the Rail Freight Group—to transfer to rail, or even road for short distances, because the emissions will be less, then surely we should accept that price.
	Turning to the problems of noise, the Minister said that the Bill would be positive for those who live around airports. I have not found that. Uncertainty about the amount and the level of noise is hardly positive, as many noble Lords have said. I shall not repeat a load of briefings from different people about noise, but I believe that there is a serious problem about how you measure noise. The method is crucial to how it affects people, in particular this quota system, which I am not sure works very well.
	I have a 35-page copy of the judgment from the Queen's Bench Division in 1993 of R v Secretary of State for Transport ex p. LB Richmond and others where the judge says that the quota count system is "wholly unreal" and seeks to bamboozle residents into thinking that more night flights somehow equals less noise and less sleep disturbance, which, the judge says, is a counter-intuitive proposition.
	I will not go on any more. This is something that we can explore in Committee with some interest but it is clearly a serious situation. If we think it is just going to apply to Heathrow, Gatwick and Stansted today, we can be quite sure that in the future it will be extended to other airports. In that context, I remember a press cutting about concern by residents around Coventry airport about noise in the last few months. Apparently Coventry airport has such a small terminal building that it does not need planning permission to operate as one so they can therefore make as much noise as they like there. I probably have not paraphrased it correctly but it is something that we have got to be careful about: new airstrips coming up with a small portakabin as a terminal and they can suddenly run flights all night.
	Finally, this Bill provides the opportunity of doing something which I do not think is in it at the moment, which is the suggestion that it is time that the air industry funded surface access to its airports, with a view to reducing the number of cars that are used—whether by passengers or workers at the airport. We all remember the long, drawn-out Heathrow Terminal 5 inquiry where we were told that the Heathrow Express was going to be extended and that there would be one or two more bus services. But for such an enormous development at Heathrow it should have been a requirement for the rail connection to have been extended to Staines and back to wherever the Staines line goes to—either Waterloo, Ascot, Reading or anywhere else—and also for a line to be added which could then extend back on to the Great Western to Reading. There is an enormous catchment area there of customers for the air and workers so why was the extension of these rail networks not part of the conditions attached to the giving of planning permission? They are absolutely essential. The traffic jams around Heathrow, even before the opening of Terminal 5, are enormous and what it will be like once it has opened heaven only knows. The same applies to Stansted.
	We need some legislation on this. Otherwise we are relying on individual public inquiries and the opinions of the inspectors to put on conditions. There is a precedent for this. In the railway White Paper of 2004, the Government made it plain that on road and rail connections to new ports developments, the port developer would have to contribute to the cost of such developments; they are putting that into practice on some of the subsequent decisions on planning applications. That is not altogether satisfactory but at least it is in the White Paper. We should make something a bit stronger in the air industry so that with any increase in the number of passengers or planes going through an airport it is required that the number of cars going to the airport is not increased—I refer to both congestion and emissions.
	In conclusion, I welcome bits of this Bill and I welcome the opportunity for looking at other issues that might conveniently fit into this Bill during Committee and thereafter. I look forward to my noble friend's response.

Lord Smith of Leigh: My Lords, I declare an interest as a director of Manchester Airports Group, which has been mentioned on numerous occasions today. I was appointed by the Greater Manchester local authorities, as the airport company is still publicly owned. Noble Lords will not be surprised, therefore, that broadly I welcome the Bill as I did the White Paper The Future of Air Transport.
	Without a successful, growing air transport industry, this country's economic prospects would be limited. If we are to continue to lead in the knowledge economy, improved connectivity is vital. The economic impact of areas where airports are located is well documented. Direct employment is probably at a ratio of 1,000 jobs per million-passenger throughput, and indirect jobs come through tourism, increased trade and indirect investment. I share some of the concerns expressed about climate change and sustainability, but aviation can become more sustainable. We cannot simply put a brake on aviation development in the UK because the impact on the country would be severe.
	As airport operators we recognise that there are environmental and other disadvantages for those who live near airports, and wish to minimise the impact of airports as bad neighbours. All airports should work with their airlines and local communities to reduce that impact. The Bill's powers will help to concentrate minds on the matter. In Manchester we have always tried to be at the leading edge in improving our environment and working with the community. We have put money into soundproofing schemes quite a way from the airport and we have continued those schemes as we have taken over other airports, particularly Nottingham East Midlands.
	At our two main airports, Manchester and Nottingham East Midlands, we are carrying out three of the four activities that the Bill will allow airports to do. We fine aircraft that exceed the noise limits that we set. We welcome debate about how we can properly define it. We are very happy at the idea of moving around monitoring arrangements. I was surprised that noble Lords seemed to think that the CAA is an independent body that can monitor aviation noise. The CAA is responsible for the allocation of air space, which has as much to do with aviation noise as the location of airports. We have had quite a dispute in Nottingham East Midlands airport because the CAA, acting outwith its powers, has decided to reallocate air space, creating new areas of noise. The CAA is as guilty of noise as airports; therefore it would not be an independent operator.
	We have voluntary schemes to incentivise aircraft to keep on track. The noble Lord, Lord Bradshaw, seemed to doubt whether those schemes worked, but with over 95 per cent of aircraft keeping to the tracks agreed with the airports and the CAA, we are doing quite a good job. There are always reasons why aircraft may go off track; they may be to do with safety and other factors.
	We monitor air quality around the airport. We support aviation's inclusion in the emissions trading scheme. We do not charge penalties at the moment, but, given the powers in the Bill, I think that we will review that. As noble Lords have said, a substantial proportion of emissions around airports come, not from aircraft, but from people gaining access to the airport. It is therefore important that airports concern themselves with public transport. As an airport company we have contributed to the delivery of a new mainline rail link to Manchester airport and will contribute to the metrolink connection to the airport. We hope that the Government will sustain their contribution also.
	I am pleased at what has been achieved at Manchester and Nottingham East Midlands airports by voluntary activity. I welcome the Minister's comments that a lot has been achieved through voluntary arrangements, and that much of the Bill may be used just as a last resort if those arrangements do not work.
	I also declare an interest in Clause 5. On two previous occasions, I tried to table an amendment introducing that clause to government legislation. The noble Lord said that the provision was introduced in the 1986 Act solely to try to make local authorities privatise their airports. We were restricted on what we could do and on what we could borrow. The noble Lord, Lord Hanningfield, wondered how Stansted would pay for a second runway. Manchester managed to pay for a second runway from its own resources as the company did not have access to public borrowing, so it can be done.
	In July 2000, I tried to add that clause to a transport Bill, but I was told that it was more appropriate to a local government Bill. When I introduced it in the Local Government Bill in June 2000, in his own inimitable style, my noble friend Lord Rooker expressed sympathy at my predicament but could not agree to its inclusion in his Bill. He asked me to withdraw it and promised that, when a suitable opportunity occurred, the Government would include it. Off message, he promised that that was a firm commitment, so I am pleased that three and a half years later, the Government have done it.
	It means that airports like Manchester will be able to do the same as other airports, such as Heathrow, and the British Airports Authority. It will give us a level playing field. I would have preferred a much simpler clause saying, "Get rid of Section 17(4) of the Airports Act 1986", but I understand the Government's intention. I welcome the opportunity to discuss with interested parties the regulations that are needed. They need to be as clear and as wide as possible in order to allow those airports to have the same freedom as other airports. I hope that the Minister will assure me that I am not just being paranoid. Under Clause 5(3)—new Section 17A(1)—the word "may" is used rather than the word "shall" in terms of introducing regulations. I am sure that that will be dealt with.
	Finally, on a totally different point, I am fascinated by the language in the Bill, which describes airports as aerodromes. The Shorter Oxford English Dictionary, defines an aerodrome in a literal sense as a course for the use of flying machines, which is amplified by saying that it is attractive level ground from which aeroplanes or airships can start. The earliest recorded use is 1902. Louis Blériot probably took off from an aerodrome, as did Biggles. Gatwick would have been an aerodrome when it was a flying school. I wonder whether we can describe Heathrow, Gatwick today or Manchester as aerodromes. They are complex transport interchanges. The word "airport" is a simple, modern one. I would welcome the Minister's assurance that, in line with the Government's policy of simple, plain English that we can understand, they will bring forward amendments to replace the word "aerodromes" with "airports".

Lord Soley: My Lords, I have an interest to declare as the campaign director of Future Heathrow, which is a coalition of trade unions, airlines, businesses and professional organisations. I also have another interest to declare: I am a long-term resident of west London and for 30 years have lived under the flight paths of Heathrow. Like everyone else, particularly in the 1970s and 1980s when Trident and Concorde were flying, we would have closed the airport the next morning if, and only if, personal interests about noise were put above the prosperity of the area. Most of us who live in west London or, I suspect, near most airports know that they are amazing generators of wealth, prosperity and jobs. Heathrow employs 70,000 people, and probably well over 100,000 indirectly. If it ceases to be a hub airport, we will pay a terrible price in west London and the Heathrow region, but the country will also pay a high price. So we need to get that right.
	I am not here to speak predominantly about that issue. I am here to speak about the Bill, which I welcome, and to raise a couple of issues in the debate. Obviously, I will not ignore the importance of noise and so forth, because I suffer that and I know what it means, but it is important that people understand the balance. As an MP, people used to write to me and I would write back saying, "Yes, noise is a problem, but there are advantages. Would you kindly tell me how many times you have flown this year?". It is amazing how many people would not reply. That is like people who say, "I am fed up with the traffic jams. I have just got back from driving my kids to school, and it was horrendous". We have to address that. There is a problem about how people perceive their own behaviour in relation to a wider social economic problem.
	I do not want to turn to the Bill before I address the really big issue of climate change, which several noble Lords have addressed. It is so enormous that we cannot ignore it. In the nightmare scenario of climate change, it will not be a matter of discouraging people from flying or driving. If scientific evidence evolves in the coming years that is so serious as to suggest really drastic action, people will be stopped from flying, driving and doing many of the things that they take for granted in our society. Frankly, in those circumstances, the economic consequences would be so severe that it is difficult to imagine what our society would look like. That is the nightmare scenario and let us not ignore it, because it could become real.
	The other way of looking at the problem, which we can do at the moment, is to say that the evidence is alarming and we had better start bearing down on carbon emissions generally, which means that we have to address that issue across a very wide field. That is not totally new. Indeed, I rather na-vely wrote about the issue in my first ever election address as a prospective councillor, which must have been about 1960. It was the only election that I ever lost, so it was very good training. I complained about the dangers of population growth and what that meant for the world. I am sure that one of the reasons that I was rejected was that local residents thought that having me in the town hall trying to impose limits on population growth might have implications for the locality that they had not planned from their local councillor. I am sure that they were quite right in rejecting my candidature at that stage. How we provide standards of living for large numbers of people without polluting our environment has always been a difficulty. It is not a new problem; it goes back a long way, but is now particularly serious.
	If we want to bear down on carbon emissions, many of the provisions in the Bill are very good and I welcome them. Charging extra for aircraft that are particularly dirty is important, but we also need to understand that modern airports and aircraft actually reduce emissions as they are developed. I know that that does not answer the question of more people and more aircraft flying, but it does mean that the aircraft industry, which is as aware of this problem as anyone sitting here today, knows that it has to bear down on noise and pollution. It is important that we do not lose sight of the fact that technology and science are part of the answer to that problem.
	I am not complaining about what is in the Bill, but I have a suggestion for my friend on the government Benches about something else to include in it. A few months ago, a British company, Arup, a developer and designer, won the award to design and build a city for 1 million people in China—the first city designed to be carbon neutral. The Minister should consider a provision to require airports to operate on a carbon neutral basis on the ground. They cannot do that in terms of aircraft emissions, because we do not have an alternative to the propulsion fuels for aircraft, but we do have biodiesel for all vehicles on the ground, the opportunity to tow rather than taxi aircraft and a number of opportunities to design the buildings to be carbon-neutral.
	I know that the Minister takes global warming seriously like the rest of us, but the way to bear down on this problem is to use every department of state and private company to bear down on carbon emissions. Simply pleading with people not to fly or drive will not work. People do not behave like that. Things will only happen in a crisis and heaven forbid that we get into that situation. Something could be included in the Bill—probably in Clause 5—where the Minister could consider a requirement on airport operators to impose an aim of achieving carbon neutrality on the non-aircraft operations of the airfield—or aerodrome, to go back to the days of Biggles, when I am sure pollution was significantly less, unless he was machine-gunning you.
	The issues are profoundly important on the wider level, but this Bill is a small but significant step in the right direction. As a west London resident who was an MP for the area for 26 years, I am inevitably concerned. I do not want to see areas that depend on major airports go down the tubes. I am particularly worried that Heathrow is in decline relative to major continental airports. It has already been overtaken by Frankfurt, Paris and Amsterdam and it will be overtaken shortly by Milan, Munich, Rome and Madrid. That process will continue, unless Heathrow gets its third short runway. So I make no apologies for my belief that we must have that third, short runway. That does not mean to say that I want it done in a way that ignores the noise problems or emissions problems or whatever. We do not do it that way. My view is that, actually, at the moment Heathrow is a pretty unpleasant experience as an airport. We could make it infinitely better.
	One of the things that we need to get better in this country is the way that local authorities work together with airports, to stop seeing airports as problems and to start to see them as possibilities: what they provide in terms of employment, what they provide in terms of prosperity, what they provide in terms of training and education for young people. Heaven knows what would happen to many of the high-tech jobs in my area if Heathrow became a point-to-point airport. We would probably lose about 20,000 jobs. If we had to produce another hub airport somewhere else to replace Heathrow, and Heathrow disappeared entirely, which is not totally impossible, the consequences would be horrific. That is why I have often made the analogy with the London docks. I was one of the people stupid enough to say that the London docks would never close, that no one would want to go to Felixstowe or Rotterdam. They did, they went and 50,000 jobs went with them. East London has only recently recovered.
	People need to be careful about this issue overall. My argument is a plea to the Minister. Will the Government include in the Bill a provision requiring airports to operate towards a carbon-neutral basis on the ground? There is no reason why we cannot do that. It would send out a strong signal that we are serious about the issue and at the same time recognise that the threat from the continental airports to places like Heathrow is enormous. People do not know it, but you can fly to far more British regional cities from Amsterdam and Paris than you can from London's Heathrow: 21 from Amsterdam; 19 from Paris; and just nine from Heathrow. If you want to scare yourself about this, go home tonight and, when you type into your computer, book yourself a ticket somewhere. Try to book a ticket from Newcastle to Tokyo or from Edinburgh to Beijing—places that have links, like with the Toyota car plant or the medical school. You used to go via Heathrow. Now you go via Amsterdam and Paris.
	That will go on very dramatically. People who say to me that Heathrow is safe and that Heathrow will always be there are saying exactly what I said about the London docks. It is a dangerous complacency. We need to make sure that local authorities and airports work together to develop airports in as sustainable a manner as possible. If we include a carbon-neutral provision in the Bill, I say to the Minister that many people will remember him as one of the people who took a very important step on the road to sustainability for air travel.

The Earl of Mar and Kellie: My Lords, the noble Lord, Lord Soley, has been most eloquent about carbon neutrality at airports and, on these Benches, we do not disagree with him.
	This transport Bill makes some modest changes to the air transport industry and for its passengers, and may reduce the burden on those who must live within the vicinity of airports. My noble friend Lord Bradshaw brought, I think, five points to our debate. The first was the methodology crisis between noise limits by number and noise by quota. He then referred to tranquil areas and the problem of track keeping. He mentioned the need for logarithmic acceleration in fines for decibel use. He asked whether there were perverse incentives buried within the EU emissions trading scheme. He also hoped that airport energy on the surface could be reduced, bearing in mind that half of all the emissions produced are produced on the ground.
	The first four clauses deal with pollution issues, particularly at airports—or, more quaintly, aerodromes. I wonder whether that word includes air strips, or is an air strip smaller than an aerodrome? The trend is towards encouraging more efficient aircraft, which make less noise and less vibration and emit less pollution from the engines. Airlines will have to weigh up the merits of spending more on newer aircraft—presumably more efficient aircraft—or paying higher airport charges. The long-term effect will be to shunt older but still serviceable aircraft on to new routes to new emerging airports—for example, Ryanair's possible exploration of an airport at Errol—or, even more hypocritically, to shunt these older aircraft into the second and third world.
	If air transport creates atmospheric pollution, air pollution and noise pollution in the vicinity of airports, and road traffic pollution and congestion, then the Bill does nothing about atmospheric pollution and road network problems. The noble Lord, Lord Berkeley, reminded us of the problems caused by "predict and provide", although it is a frightfully nice policy.
	I suspect that new Section 38C(3)(b) will attract interest in the vicinity of many airports, none more so than in Aberdeen where a surprisingly early close to night flying has been in force for many years. I believe that powers to do that in Scotland would be devolved to Scottish Ministers.
	In retrospect, I was brought up to believe that aircraft noise went with the prosperity which a nearby airport generated. Perhaps that attitude is changing. Certainly the noble Lord, Lord Soley, emphasises the economic importance of airports such as Heathrow.
	The noble Baroness, Lady Flather, spoke extensively about the outer flight path and in particular the problems at Windsor. I certainly admit that when I was a schoolboy at Eton there were occasions when aircraft were taking off in a particular direction when everything came to a halt for about four minutes—often quite a welcome four minutes. I hope that the noble Baroness will accept that the ever-larger aircraft may well arrive early and will need to be allowed to land ahead of schedule, and that may mean in the early morning. While flying to and from Iceland during the Recess, I noticed that Icelandair flies all its European routes from Keflavik in the early morning, albeit that it is an established part of a Reykjavik short break that you have to catch the airport bus at 5 am.
	The Bill does nothing to deal with the proper taxation of aviation fuel. Although air passenger duty does act as a poor substitute, it fails to tax properly because it taxes passengers rather than airplane movements. It does not, therefore, tax largely empty aircraft.
	Clause 5 brings some liberalisation to airports owned by local authorities in England and Wales. Presumably that will allow them not only to sell services but also allow retailing at those airports, which in turn may make the financing of the airport easier. I suspect that such airports will end up with larger terminal buildings, larger car parks and more local road congestion. However, I hope that the noble Lord, Lord Smith of Leigh, will be satisfied with Clause 5.
	In Clause 6, I am not at all surprised that the Secretary of State wants to dump the hassle of appeals over route licences. The failure of previous Secretaries of State, for example, to arrange for the city of Inverness, and hence the Highlands and Islands, to have a slot at Heathrow suggests that the appeal process did not work anyway. Is the Minister satisfied that airlines will not find other routes for appealing against CAA decisions? Is the Secretary of State not involved in the appointment of the CAA?
	Clause 7 has drawn interest from the House, and in particular from my noble kinsman the noble Countess, Lady Mar. She was, among other matters, concerned about the contamination of cabin and, even more importantly, flight deck air supply. That clearly needs further examination. There is also a real issue of DVT here for passengers. The Bill quite rightly has a clause attempting to deal with health issues for passengers and crew. I suspect that long-haul flights will be reduced by the addition of stopovers. That will add to the expense of flying and create more airport air and noise pollution. It may well lead to more people being banned from flying on medical grounds.
	Clause 8 seems eminently sensible, provided that it leads to a comprehensive upgrade of the documentation and deletion of all the outdated regulations. Clause 9 brings us to the mildly controversial Air Travel Trust fund in place of the now partial ATOL arrangements. There must be no doubt that airline operators within a deregulated, free enterprise market will on occasion go bust and that some of their customers will be stranded away from home or be unable to fly at virtually the last minute. The question is whether airline operators should provide in advance a bond to rescue their passengers in the event of going bust, or whether every air passenger should pay into a fund to rescue those who fly with financially dodgy airlines. That payment would presumably be made by the airline. I think that the noble Lord, Lord Faulkner, favoured the £1 levy.
	That reminds me of the End-of-Life Vehicles (Producer Responsibility) Regulations 2005, which come into force in 2007 and will require all manufacturers to pay for the scrapping of their vehicles. While mass-produced cars generally go for scrapping after 12 to 14 years, cars such as Rolls-Royce and Morgan are rebuilt endlessly and do not get scrapped. Those two manufacturers would probably regard such a regulation as unfair. If the context were that it was desirable to create more cheap flights, the air travel fund would be the right way to go. But on these Benches we believe that air travel creates significant pollution and congestion and does not desperately need to be expanded willy-nilly, particularly for leisure purposes. Hence we would prefer airlines to provide their own funding for bankruptcy.
	The Bill will need thorough scrutiny in Grand Committee. That is a suitable place in which to ensure that it will deliver the sensible proposals that it makes.

Baroness Hanham: My Lords, I suppose that I should join the noble Lord, Lord Soley, in declaring the fact that I live under quite a few airplanes in West London. My speech ought to be received against that background—not to say that I am biased.
	I do not suppose that I need to point out to the Minister that the Bill has been received with rather muted enthusiasm both here and in the other place. But it has enabled us to have a pretty wide-ranging, if not always totally relevant, debate. As practically every speaker has drawn attention to, there is no doubt that aircraft noise is becoming one of the most serious complaints of residents within miles of any airport. With new airports being established and increased use of others, it has been estimated that in the very near future nowhere in the United Kingdom, not even the Outer Hebrides, will be without ambient noise. The sound of aircraft will be audible everywhere. We are a small island in flying terms.
	In London, the inquiry into the fifth terminal was beleaguered by such concerns about noise. As my noble friend Lady Flather said, the surrounding boroughs are still incandescent at the effect of night flights and the possibility that they may be deregulated. Anyone who lives anywhere near the descent or approach path of airlines is affected. It is interesting that although the Government are strengthening the central control on noise at the three London airports, control elsewhere is to be left to the discretion of the other airports, which can decide for themselves whether to implement sanctions against companies that do not have appropriate noise reductions. Since the policies already exist, and the airports can apply sanctions to the noise, it can surely be only the last throw to make it a statutory possible requirement. The noble Lord, Lord Soley, is of course correct that there are economic and environmental impacts associated with airports, and we should not ignore those. But noise is one of the major problems associated with airports, and it is sensible for everybody to look forward to see how it can be reduced so that we maintain the economic viability of airports in the future.
	A number of noble Lords referred to emissions. The discharge of emissions into the atmosphere is of particular concern because of their effect on global warming. The increasing number of airplanes in the upper atmosphere can scarcely be addressed if emission control is left to the future prospect of lower emissions. On the point made by the noble Lord, Lord Faulkner of Worcester, we accept that fundamental decisions will have to be made about the liberalisation and long-term growth of air traffic.
	Perhaps the Minister can tell us what discussions have taken place during the EU presidency, a point raised by a couple of noble Lords. In particular, what proposals were discussed on aviation emissions trading? Mr Darling, the Secretary of State, said that it was something that the presidency would deal with. Does the Minister have any news on whether those discussions have been successful?
	The Bill is silent on any review of compensation for those who are affected by both noise and emissions. We believe that compensation should be more generous and we will be looking into that at further stages. We will also want to test the local airport consultative arrangements and their effectiveness. As has also been said, local authorities have a major role to play in how their local airports operate and the issue of noise there.
	As I understand it, the air travel fund is bust and is currently being supported by the Government. However, it is clearly an important fund as it backs up the ATOL system on which—as noble Lords said—passengers do rely. I am not sure how many passengers who believe they have ATOL security and rely on it appreciate that support for it continues only as a gesture of the Government. It remains a significant protection. During our consideration we will need to test the best way of ensuring that, with these liberated air travel arrangements, there is appropriate security for passengers and travellers.
	Clause 7 and the health issue were significantly and succinctly referred to by the noble Countess, Lady Mar, who has enormous experience. The health of passengers is of great importance as the amount of air travel undertaken increases. There is still a sizeable question about whether the air within aircraft, in the cabin, is of suitable quality. There have been many discussions on the issue, and I remember a Health Select Committee on the subject in this House. Concerns were raised then and are still being raised that the air quality is inadequate to support passengers. There is also—and this becomes increasingly relevant—the danger of the spread of infection if the air quality is insufficient. At the very least, poor air quality makes travelling unpleasant. But the noble Countess has extended those concerns to describe the danger to crew as well as passengers.
	To what extent will Clause 7 cover any of those aspects, or will there be restrictions on what the clause means? Perhaps it will be restricted to enabling the spraying of the inside of cabins, to prevent infection when planes land. The noble Lord, Lord Clinton-Davis, drew attention to the valuable role that can be played by pilots, for example, in the design of such systems. After all, they are not only the ones who experience them most; they are the people who have to deal with dangers when they arise. If there is inadequate or poisoned air quality, there is concern for them.
	The noble Lord, Lord Soley, raised some interesting points about emission controls on the ground, but rightly drew an analogy with people refusing to stop driving. People will not stop flying or driving. It appears that technology needs to catch up with the concerns of those who will give up neither their planes nor their cars. Why should they? However, I am sure that technological developments will affect in future everything that we have talked about. I hope that the Bill is now wide enough for us to be able to look a little further into the future when we discuss it in Committee.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have participated in the debate. It has given us great food for thought, which we will digest more fully in Committee on the detailed points, of which there are a large number. I hope that noble Lords will forgive me if I am not able, in what is inevitably a limited speech, to enter into every detail raised this afternoon. Many of them are important Committee points that we will have the chance to discuss fully. I want to deal with the broader issues, particularly as some of them have been raised in sharp profile in the debate.
	The aviation industry is a success story. Millions of our fellow citizens benefit from that success. Large numbers of them who work in the industry benefit in terms of their livelihoods, but increased air travel has brought great benefits to many. I bear in mind the point made wisely by my noble friend Lord Soley, which is that those in favour of restriction for many ought really to stand up and say whether they are in favour of restriction for themselves. We all recognise that the demand for air travel is a reflection of a good that people wish to consume. That cannot be unlimited, of course, or we could easily arrive at a situation in which vast areas of our country were subject to such intolerable conditions on the ground that we would have reduced the quality of life for our fellow citizens. Many of them might not have had the benefits of air travel but were suffering the consequences of uncontrolled expansion, so we have to strike a balance.
	The debate has reflected the extent to which that balance is inevitably difficult to achieve, but let me indicate to the House that the Government are not following a policy of "predict and provide", the phrase certainly used by my noble friend Lord Berkeley. That is not the case at all. However, we can measure expectations of increased opportunity for air travel and pressure for that, which we are obliged to meet so far as we are able, consonant with having due regard to the interests of those who live near airports and whose case was so ably deployed by a number of speakers. I want to emphasise that the Bill is in broad terms there to strike a balance between those competing interests. We have a great deal of work to do on aircraft emissions and noise levels; that is why I am pleased to report to the House, in response to the noble Baroness, Lady Hanham, that during our presidency of the European Community, we are making progress on an emissions scheme. We look forward to some crucial meetings over the next few weeks that relate to that scheme. We all recognise that there is no way in which we can solve the problem on the basis of a UK unilateral position alone.
	Noise is the other great detrimental feature of airport expansion. I should say en passant that I will use the word "airport". My noble friend Lord Smith upbraided me for the archaic use of "aerodrome" in the Bill. Part of the measure reforms and refers to the 1982 Act, when aerodromes existed and the terminology was used more frequently. We are therefore somewhat stuck with the fact that we have to refer to the words and phrases in that Act, or it would cause confusion about what we were reforming. He is right; I hope that we will take the House beyond the land of Biggles and other heroes of the 1940s and into the challenges of the 21st century.
	In doing that, airport noise is of great importance. The noble Lord, Lord Hanningfield, did not have too many constructive moments. He is against the expansion of Stansted—surprise, surprise. It is wonderful how the Opposition can take up a position like that; they might find it more difficult if they tried to meet demands for expansion in this country. We are concerned about the fact that expansion should be limited to specific areas of the country. The great danger—it would be much more detrimental to the wider community—would be if we went in for a vast proliferation of fresh airfields. Unless he is arguing that, under a future Conservative administration—if that is not an inconceivable thought for the House to accept at this stage—there would be no expansion of air travel at all, he has to replace the expansion of Stansted with some other concept. However, in one of his constructive moments—

Lord Hanningfield: My Lords, one accepts that there is a large runway at Stansted, and that 25 million passengers a year go through it. It would be possible to have 40 million passengers a year on that runway. Therefore, the policy that I, my party and a lot of other people support is that there could be maximum use of that runway. I repeat what my noble friend Lady Hanham said—we have to consider the long-term and continuing expansion of air travel. However, the next Conservative government, led by David Cameron, will have to address that point.

Noble Lords: Oh!

Lord Davies of Oldham: My Lords, I never thought that I would accuse an opposition spokesman of being more farsighted than myself, but here we have the clearest evidence that we already know the result of a particular election. We wonder why one candidate does not pack his bags and go home at this point if it has already been decided in the inner councils of the Conservative Party that that should be the result.
	On the more general point, I assure the noble Lord that, unless he wants to limit expansion significantly, his argument that you put more pressure on a single runway is either a limiting factor or not. If it is not a limiting factor there is no gain so far as the environment is concerned. If it is a limiting factor he has to give some illustration of how he wants to limit demand in those terms. We are concerned to meet areas of demand consonant with making sure that the effects on those who live near airports are minimised. That is why—I was going on to my constructive point—

Lord Berkeley: My Lords—

Lord Davies of Oldham: My Lords, let me finish my constructive point, lest it be thought by the Conservative Front Bench spokesman that I am incapable of making a constructive point. He is right that we need to consider the question of how we measure noise. There may be a constructive thought in that we need to revisit the measurement of noise, which after all has obtained for more than 20 to 30 years. In this new day and age we may need something more sophisticated that is more accurate as regards the impact of noise on the community. I accept the noble Lord's challenge and will perhaps explore aspects of that in Committee.

Lord Berkeley: My Lords, on the question of forecasts on Stansted, does my noble friend accept that air travel, like any other transport industry, should bear the full costs of the damage that it does to the environment? That could be by taxation or some other means of increasing the cost of fuel. Surely the higher charges involved will affect the forecast growth of the industry.

Lord Davies of Oldham: My Lords, I accept that in principle. The measure is premised on the assumption that the industry bears its external costs, which relates to the environment and the issues that have been outlined in today's discussion. How far that would significantly reduce the demand for air travel is an interesting point. These are challenging issues.
	Once again I call in aid my noble friend Lord Soley, whom I am delighted to have heard in this House. I heard him often in the other place with great pleasure. We should not pretend that we are in some protected economic environment where we can mess about with airports and the aviation industry, have throwaway lines on restrictions without careful thought, or not be mindful of the fact that it is an intensely competitive industry. Others are poised to take advantage of weaknesses in our provision. It might not relieve the number of flights that appear in the United Kingdom; it just means that others may be the chief beneficiaries in an economic sense, or it may bring benefits to those on the ground.
	The other point that I want to pick up from the noble Lord, Lord Hanningfield, is that I can assure the House that resources gained from charging airlines should be devoted to the local community. The noble Lord mentioned a golf course, which may or may not commend itself to the local community. Let me make the obvious point, to which my noble friend Lord Smith will testify, that if you are running an airport and meeting the challenges of local people by constantly consulting them about the environment, you will certainly find out where they want the resources spent from any gains that you may have made. We do not have to worry unduly about how "airport managers"—a phrase that was expressed in rather disparaging terms—or the industry will let the community down. It will be responsible about consulting on the distribution of resources.
	I heard what the noble Lord, Lord Bradshaw, said about tranquil areas, which are all too few. Of course, there is no legislative definition of a tranquil area. I do not know a tranquil area over which aircraft do not fly. If aircraft fly high enough, they do not disturb the area, but the noble Lord will recognise that we do not have such a concept. Not even our national parks, which are tranquil areas, are defined upwards in that way.
	I recognise, of course, that aircraft movements and aircraft noise threaten the environment not just in the immediate vicinity of airports. We must examine the issue with the greatest of care. I accept that I will be pressed in Committee about how we will go about it. Suffice to say that in introducing the Bill I was concerned about achieving a balance. We intend to be forthright about ensuring that the industry meets its external costs, and has proper regard to both noise and pollution.
	The noble Countess, Lady Mar, and the noble Baroness, Lady Hanham, raised the important issue of health, as did my noble friend Lord Clinton-Davis who was very supportive in his speech. I was grateful for that, given his long experience in the industry, and his present role as president of BALPA. Of course, we are concerned about contaminated air issues, which is why I responded with the greatest of care to the Written Question that the noble Countess addressed to me. Airline pilots and cabin crew are as one with the Government in their interest in ensuring that air is not contaminated and that aircraft are safe to fly and work in and to pilot. That is of the greatest importance. There have been limited cases of illness in aircraft, but that does not alter the importance of our paying due regard to the issue. It will be recognised within the framework of the Bill that we are addressing health issues. It is an important point that I hope will be developed in Committee. In broad terms, I want to say how important the issue is regarded by the Government.

Lord Clinton-Davis: My Lords, will my noble friend give way?

Lord Davies of Oldham: My Lords, if my noble friend will forgive me I am trying to work within fairly strict time limits, and I have an awful lot to cover.
	I accept what my noble friend Lord Faulkner said that the best way of solving the problem of noise is to reduce the number of aircraft movements and the demand for air travel. I hear his point, which no doubt he will express with great force in Committee. The evidence runs strongly against him. It is not an easy case to argue, and he is not on the winning side at present, although he may anticipate that the balance will change and that our fellow citizens will put such a high priority on improving environments close to airports that they will reduce their demand for air travel. At present, that is as likely as large numbers of our fellow citizens voluntarily giving up their car use. That is happening to a limited degree, but it would be a foolish government that put a great deal of stock by that concept of reduction of opportunity.
	The noble Baroness, Lady Flather, also emphasised the aspects of noise and night flights, in particular. That is a crucial issue in the Bill, and I hope to discuss those matters with her further. My noble friend Lady McIntosh indicated that I adopted a courteous response to her speeches. I do, but that does not make them any more comfortable to listen to, because she articulates in the strongest possible way the concerns of the people who, in many ways, she represents by serving on the committee regarding Stansted. When she mentioned the fact that the noble Lord, Lord Hanningfield, is chairman of the local authority that is responsible for the beautiful villages in that part of the world, I was not sure whether that was cause and effect. Many of us have known about Uttlesford and such places well in advance of the noble Lord, Lord Hanningfield, adopting his benign control of Essex, in so far as it proves to be benign.
	I assure my noble friend that we recognise that a great deal of the debate revolves round Stansted, though not solely. She is well aware of the pressure in other airports. The issue has a particular salience when it is in a part of the world that is green and pleasant. We recognise that we have to convince the neighbourhood of Stansted that its interests will be protected by the way in which we develop the airport facility. We ought not to be too pessimistic. You can increase aircraft movements and reduce noise if there are effective and strong incentives for the industry to produce quieter airports. That has been going on. Aircraft are becoming quieter. Of course, we need to put greater emphasis on that, which is exactly what the Bill does. It emphasises the fact that pressure will be placed on those who pollute the atmosphere, either by emissions or by noise, and they will pay. Therefore, there is an incentive for them to use aircraft that meet high specifications.
	I am grateful for the remarks made by my noble friend Lord Smith on the opportunities that the Bill gives to airports for which he has considerable responsibility. We always felt that there was unfair discrimination. In recent years, Manchester airport has triumphed over such unfair discrimination and we hope to see that continue with the development of the activities of East Midlands airport.
	My noble friend Lord Soley never gives support without exacting a price, which is that I should consider carbon neutrality on the ground for airports. That is a most interesting suggestion and a mighty challenging one, as he knows. In some parts of the world it is easier to do that from a new beginning rather than from where we are now. He will recognise just how great a demand that is. In the spirit of friendship, I undertake to consider that. We need to explore that fruitful matter and if we have particular economic activities that present real challenges, no doubt the question should be addressed to them most forcefully. I believe that was the burden of his comments.
	My note says that I hope I have adequately met the contribution of the noble Baroness, Lady Hanham. I am sure I have not, and she will make that clear in Committee. She will recognise on health issues and on trading emissions that we are making progress; the Bill represents that. On that basis, I hope that she will feel that I have not neglected her contribution to the debate.
	On Question, Bill read a second time, and committed to a Grand Committee.

Transport (Wales) Bill

Lord Evans of Temple Guiting: My Lords, I beg to move that this Bill be now read a second time. The purpose of the Transport (Wales) Bill is to provide powers to enable the National Assembly for Wales to deliver a first-class integrated transport system for Wales. Along with existing powers and those that the Assembly is acquiring under the Railways Act, the Transport (Wales) Bill will provide the Assembly with a comprehensive and coherent set of transport powers for the first time. At present the Assembly has to rely on a patchwork of legislative provisions relating to transport that date back to the Ministry of Transport Act 1919. The Bill will ensure that the Assembly has the powers it needs to deliver a properly integrated transport system for the whole of Wales.
	I shall explain briefly how the Bill has been carefully developed over a number of years. As far back as 1997, the Welsh Transport Advisory Group, chaired by my right honourable friend the Secretary of State for Wales—who was then Transport Minister in the Welsh Office—started examining the transport legacy which the Assembly would inherit. That work was further developed in the policy review of public transport conducted by the Assembly's former Environment, Planning and Transport Committee in 2001.
	When the Assembly Government responded to the review in July the following year, it indicated that it would seek transport planning and implementation powers along the lines of those available to the Mayor of London under the Greater London Authority Act 1999; a power to enable the Assembly to establish a joint transport authority and to allow for that possibility in any part of Wales; and to seek power to direct the Strategic Rail Authority. There was a wide degree of cross-party support for those proposals in the Assembly itself.
	Noble Lords will be aware that this Bill was originally published as a draft on 27 May 2004. It was then subject to scrutiny jointly by the Welsh Affairs Committee of the other place and the Assembly's Economic Development and Transport Committee. That represented a small but significant piece of constitutional history, as it was the first time that a Select Committee from the other place had formally met with a committee of a devolved administration. Those meetings demonstrated an innovative and progressive approach to pre-legislative scrutiny and, again, they demonstrated a high level of cross-party support for the measures in the Bill.
	There was also a major public consultation involving all key interested parties. In total, 14 recommendations made as part of the public consultation were accepted and changes were made to the draft Bill; 11 of those recommendations mirrored those within the Welsh Affairs and the Economic Development and Transport Committees' reports on the Bill. For example, it was recommended that a clause should be included in the Bill to provide the Assembly with the power necessary to establish a public transport users' committee for Wales. That recommendation was accepted and the power is now covered in Clauses 8 to 10 of the Bill.
	I should make it absolutely clear at this stage that the rail provisions, which were included in the draft Bill, have now been removed. Equivalent powers now form part of the Railways Act 2005. That means that while rail services will form a central part of the Wales Transport Strategy, most of the relevant rail provisions are now contained in that Act.
	I have hosted two meetings in the House of Lords attended by the relevant Ministers—one in July 2004 and the other on 19th of last month—to provide further information on the Bill to Members of this House who wished to attend. We are not planning to table any government amendments, as the sheer amount of pre-legislative scrutiny has refined the Bill in such a way that we are all very happy with it. However, I should be grateful to noble Lords if they could let us know whether there are any ways in which the Bill could be further improved and I undertake to give the most careful consideration to any such suggestions.
	I turn briefly to the provisions of the Bill. The Transport (Wales) Bill will make the development of transport in Wales a core task of the Assembly. First, the Bill will place a new statutory duty on the Assembly to develop and implement policies for the promotion of safe, integrated, sustainable, efficient and economic transport facilities and services. The Assembly would also be required to prepare and publish a Wales Transport Strategy setting out the Assembly's vision for a transport system which strikes a balance between our economic, social and environmental objectives, as well as focusing on how that vision is to be delivered. The Assembly intends to consult widely with all interested parties in drawing up the strategy.
	The Bill contains a statutory requirement on the Assembly to consult Welsh local authorities and those in England that border Wales. English authorities will be involved in the development of the Wales Transport Strategy and the Welsh Assembly Government will work to enhance transport services and infrastructure—so the strategy will work for people on both sides of the border.
	Secondly, while local authorities are already required to prepare local transport plans, the Bill will now provide a formal mechanism to ensure that their transport plans are consistent with the Assembly's overall vision for transport in Wales. In other words, local authorities will be required to produce new local transport plans in line with the Wales Transport Strategy. In order to ensure that local transport plans are consistent with the Wales Transport Strategy, they will need to be submitted to the Assembly for approval. Refusing approval will be possible only with the approval of the Assembly in plenary session. The Assembly and local authorities will work closely on these plans and I anticipate that any refusal to approve a plan would be wholly exceptional.
	Another important element of the Bill is the provision to facilitate greater joint working by local authorities to produce transport plans, which is essential to make real improvements in key transport corridors. The particular geography of Wales means that transport issues often cross local authority boundaries, and consequently need to be tackled on a regional basis. The most telling example of this is, of course, south east Wales, which covers 10 local authority areas and around half the population of Wales. Here, there is an existing pattern of travel-to-work movements from the valleys into Cardiff and Newport, which is superimposed on more strategic east-west movement along the M4 corridor and, to a lesser extent, the A465 heads of the valleys road. A regional approach is the only realistic way to tackle transport planning in these circumstances. It would address both public transport and road traffic management, as well as dealing effectively with the strategic trunk road network.
	The Bill also contains a power to establish a joint transport authority, which would consist of two or more local authorities working together jointly to tackle transport issues in a given region. Powers granted to a joint authority might, for example, include the co-ordination of bus timetables, a standardised approach towards bus lanes and bus stops and improved services across local authority boundaries. This is an enabling provision, and the Assembly Government have made it clear that they would invoke that power only if they felt that the current voluntary arrangements were not making sufficient progress in delivering integrated transport solutions in any part of Wales.
	The next main provision of the Bill will enable the Assembly to provide funding for transport services direct to transport operators, in order to ensure that unfulfilled transport needs in Wales are met. The new power might be used to support services which cross a number of local authority boundaries; for example, to implement the Assembly's long-distance bus and coach strategy. The Bill will also give the Assembly the power to provide revenue payments to airline operators or capital funding to provide new airport facilities, subject, of course, to the constraints of EC competition law. This will allow the Assembly to implement its policies on intra-Wales scheduled air services, for example.
	Additionally, the Bill would enable the Assembly to establish a public transport users' committee for Wales. As I said earlier, this is a new provision added in response to views expressed during pre-legislative scrutiny. The committee will cover all public transport modes—that is, ferries, air services and taxis, as well as buses and trains—ensuring that the voice of the passenger is heard. I should point out that funding for all aspects of the Transport (Wales) Bill—for example, the establishment of the public transport users' committee—will be met by the Assembly and there will be no new money from Westminster.
	I greatly look forward to listening to noble Lords' views on the Bill. If it is enacted, the Assembly will have a new statutory duty to develop and implement policies for the promotion of safe, integrated, sustainable, efficient and economic transport facilities and services. It is an aspiration that we can all share. If noble Lords have questions about any aspects of the Bill, the policy that underlies it or the detail of how we envisage the arrangements working, I would be more than happy to discuss these with them, or to provide a written reply as the groundwork for further discussion in Committee.
	This is an important Bill which has received widespread support from interested parties in Wales and other places. I hope that in this House we can achieve a similar degree of consensus on the principles of what is a significant Bill for developing an integrated transport system in Wales. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Evans of Temple Guiting.)

Lord Roberts of Conwy: My Lords, this is a comparatively simple and straightforward Bill, as indeed it should it be after its prolonged pre-legislative scrutiny towards the end of the last Parliament and all the consideration its main elements received prior to that. As the Minister reminded us, the Assembly published its Transport Framework for Wales as far back as November 2001. Since then, there have been a number of separate studies devoted to rural transport, the provision of rail services and the future of air transport in Wales.
	When one considers the volume of preparatory work and literature, it is almost surprising that all we have at the end of the day is a 17-clause Bill laying a duty on the Assembly to develop and implement transport policies and prepare a strategy for implementation through local authorities and other subsidiary bodies. Indeed, the Government themselves admit in the Bill summary that it,
	"is not intended to break new ground, but rather to ensure that the Assembly has comprehensive powers in the transport field enabling it to provide an integrated transport system for Wales".
	I do not wish to be cynical, but it is difficult to avoid the conclusion that there has been a great deal of talk and very little delivery on better services so far and that the Assembly Government are not much nearer now to effecting significant transport improvements in Wales than they were when all this began five and more years ago.
	I had responsibility for transport in Wales in the 1980s and early 1990s. In 1994, we announced a proposal for a southerly bypass of Newport off the M4. I am astonished that so little progress has been made with that proposal over the past 10 years. I gather that progress with the upgrading of the A465—the heads of the valleys road—also leaves much to be desired.
	While I am on the subject of roads, which does not feature prominently in the Bill, I hope the Assembly remembers that it was the extensive road-building programme pursued in Wales by the Conservative government that brought new factories and prosperity to Wales along the M4 in the south and the A55 in the north. Good road communications and their maintenance are absolutely essential to a thriving economy, which is the main financial prop of our public services and so much else.
	The mainspring of the Bill, and all the discussion that has preceded it, is the need for an integrated transport policy and the system that goes with it. Such a policy has been a popular battle cry with transport boffins for as long as I can remember. The trouble is that the ideas which stem from such a policy are often fanciful and do not match the needs and priorities perceived by the public or, indeed, dictated by the realities on the ground. People will not readily abandon their cars for trains or buses simply because transport planners think they should. I sound a cautionary note simply because it is so easy to get the strategy wrong if it is dictated by theoretical rather than practical needs and considerations.
	In spite of the availability of subsidy, there must be a realistic demand for a service, otherwise public money runs to waste. We are all familiar with the sight of empty buses, trains and aircraft too, fuelled at the taxpayers' expense. I hope that the public transport users' committee, to be established under Clause 9, will help to ensure that realism, rather than wishful thinking, prevails in the Assembly's strategic planning.
	As the Minister reminded us, there was a substantial amount about rail services in the original Bill. However, the clauses establishing rail passenger committees and the power of the Assembly to give directions to the Strategic Rail Authority have all disappeared. We are left wondering just how Network Rail and the various rail services are going to contribute to the integrated transport strategy and its implementation. That rail is an all-important ingredient in such a strategy goes without saying. The paucity of references to rail in the Bill worries many, including the Very Reverend Archimandrite Father Deiniol, who has made representations to a number of your Lordships on behalf of his group "Un Ein Blaenau", which means "moving ahead". The title has a special poignancy because the organisation is based at Blaenau Ffestiniog.
	There is renewed interest in providing an internal air service in Wales linking north and south. The Assembly will have power under Clause 11 of the Bill to establish and financially support such a service. There have been numerous attempts to do this in the past and all have failed for lack of customers and patronage. In my ministerial days, there was a daily service between Cardiff airport and Hawarden, subsidised by Clwyd County Council. I often found myself the only passenger on the flight. The latest proposal involves Swansea, Cardiff and RAF Valley, Anglesey, and the venture is being supported by the Assembly. Of course I wish it every success.
	There is probably more human traffic between north and south these days than in the past, especially by officials of the Assembly and local government. But the incentive to make that 200 mile each-way journey to and from Cardiff by air in a day, rather than the two-day trek by road, with mileage and overnight allowances, has to be significant in terms of time, cost and convenience to attract sufficient private as well as public sector customers to sustain the service.
	A major proposal in the Bill is that the Assembly has power to require two or more local authorities to enter into arrangements for the joint discharge of their transport functions. This makes good sense and—dare I say it?—it is a power that should have been available since the time of local government reorganisation in 1993.
	There is also the power to form joint transport authorities to discharge specific functions. Some local authorities have already wisely combined to tackle their transport problems jointly, but the new JTAs will be separate corporate bodies, created by the Assembly, although largely composed of local authority members. The Welsh Local Government Association doubts the value of the proposed new authorities which may overlap the existing consortia in terms of area and function. There is a legitimate argument here which we must consider carefully in Committee, together with cross-border issues.
	Despite the longevity of the Bill's gestation, there is now a feeling of urgency about the need for it and the power it confers. There is certainly a sense of urgency on the ground in Wales. The Institution of Civil Engineers recently produced an assessment of the transport infrastructure in Wales and gave a C grade—that is, average category—to all forms of transport, except airports and seaports which fared rather better with a B grade.
	We must ensure that our transport infrastructure is of the highest quality and is capable of meeting the needs of a versatile economy and of a society which is very dependent on its mobility. If the Bill can help in that direction, we shall be happy to support it.

Lord Bradshaw: My Lords, as is obvious, I am not Welsh, but I have worked in several places bordering on Wales and Cardiff. I hate to disappoint the noble Lord, Lord Roberts of Conwy, but the revolution in railway services which he mentioned is about to start in Wales in December. There will then be a much more regular service—one of two hours—between Holyhead and Cardiff. There will be regular-interval services over a great many of the lines in Wales. Much attention is being given to providing good connections at Chester, Shrewsbury, Hereford, Newport and Swansea with mainline services. Better rolling stock will be employed in the services. There will be a 28 per cent increase in daily services and they will rise from 800 to 1,000. That is not at the expense of the taxpayer; it is all within the existing franchise.
	Therefore, let us realise that without the intervention of the Assembly and the powers sought in the Bill, great improvements are already taking place. It has taken the rail industry nearly seven years to recover from the havoc to which the noble Lord, Lord Roberts, was party in dragging our railway system apart. Arriva Trains Wales is following South West Trains and other train operators in at last putting together railway timetables.
	There is, however, an important point for the Government to note. The incentive systems included in franchise agreements work against providing connections. So much is put on the trains being punctual that the question of whether the passengers make a through journey is entirely lost. When a transport system depends on connections for its efficiency, the efficiency of the transport system will decline.
	While something of a revolution is at hand—Arriva Trains Wales has produced a standard-pattern timetable, including through trains—there remains a lot to do about the train services. We need only go to the valleys to see rolling stock which is, together with that of Northern Rail, totally unacceptable in the south-east of England, or anywhere where people regularly come to this place and complain. Yet the franchise, which has 13.5 years to run, does not provide for the replacement of the rolling stock. The Assembly might have been given powers at least to ask the franchisee what would be involved in obtaining some suitable rolling stock to work on the valley services.
	Last year, the valley services gained 10 per cent in patronage with the most rotten rolling stock. If that rolling stock were replaced, the service would be revolutionised with more passengers. Some of the people who the noble Lord, Lord Roberts, says must use their cars might be attracted to the train services provided. I ask the Minister to consider whether the Assembly's powers enable it to alter the Wales franchise without going on bended knee to the Department for Transport in London to deal with something which is essentially a Welsh matter. Although the trains serve the stations between Chester and Shrewsbury and Hereford, which are in England, as they must, they are basically Welsh services and they ought to be dealt with by the Assembly.
	There is another threat on which I hope the Minister will be able to comment or, if not, write to us about. The whole of the service has been predicated on the timetables which apply along the north and south Wales coast.
	Yet 18 months ago First Great Western introduced a half-hourly service between Cardiff and London and the franchise is about to be relet. Letters have been sent out by the Strategic Rail Authority in its dying days threatening to reduce the service from Cardiff to London from half-hourly to hourly.
	Those of us who travel on these trains know that many of the existing trains are full and cutting the service in half will increase dissatisfaction and increase the load on the M4. It seems nonsensical and it will probably save little rolling stock. The Minister should give urgent attention to the matter because the whole of the new timetable is predicated on those services being available.
	In many other ways the Bill is strong on setting up new bureaucracy. It sets up procedures whereby the Assembly will look at local transport plans. It provides the setting up of a regional transport authority and the arrangements for a new transport users' committee. Those all cost a great deal of money but they do not improve the transport system that people have available to them. The Welsh were extremely clever when they introduced the new old people's bus pass in Wales, because unlike in England it applies over the whole of Wales. Although the local authorities in Wales issue the bus passes and they have their badge on them, they are available over the whole of Wales, so the same system applies everywhere and one can go anywhere in Wales on it. That is an extremely good thing.
	The other good thing about the Welsh system is that it agreed that for each passenger carried there would be a single system of reimbursing the operators. That is a great difference from the system that applies in England, where every local authority negotiates with the operator so over the whole country there is a patchwork of agreements. People are usually confined to the district council that issues their bus pass, so they can go a little way but not very far.
	In providing a decent bus service, one of the most important things—which was referred to the noble Lord, Lord Roberts of Conwy—is that bus services need to be co-ordinated. There are two ways of co-ordinating them; we can have the Assembly saying that a bus will be run from here to there and someone else will run it from there to the next place; or we can encourage the bus operators to co-ordinate the services themselves. Unfortunately, the Competition Act 1998 made it extremely difficult for bus operators to work together to provide just what passengers want: through services and through tickets; an integrated service with the through timetable, because all those things are disallowed under the competition law, which was aimed more at big industries, not small bus services. Bus operators are frightened even to go and talk to other bus operators about the co-ordination desired. A great deal could be done if in Wales it were possible for bus operators to co-ordinate their services together, because whatever powers we give to the Assembly to co-ordinate them, that piece of legislation would almost certainly need repealing.
	The appointment of a traffic commissioner in Wales would have been advantageous in this Bill. At present in Wales one must go either to Birmingham or to Manchester to a traffic commissioner. There is no traffic commissioner in Wales, yet there is a great deal of need. I am sorry to say that in Wales we have probably some of the worst abuses that exist. On the A55 between Chester and Holyhead the North Wales Police have pulled in large numbers of lorries that are breaking all the rules, particularly those related to drivers' hours, many of them working as long as two or three days without proper rest, yet there is no disciplinary body in Wales that can deal with those people.
	Similarly, in south Wales there are some of the most irresponsible passenger operators in the country. I will not name them, but I am sure that they will be known to some noble Lords present. It would be useful if there was a traffic commissioner in Cardiff who had responsibility for Wales and got to know intimately the operators instead of depending on someone several hundreds of miles away who has plenty to do as things are.
	The Bill is an opportunity lost. It does not acknowledge what has been done; it does not go so far as to make impossible other things that it might have done. My noble friend Lord Mar and Kellie will reflect on some of the things that are being done in Scotland that might have been done in Wales if further powers were available to the Assembly, because the Scottish example is one that I would have hoped Wales would follow.

Lord Prys-Davies: My Lords, unlike the noble Lord, Lord Roberts of Conwy, and the noble Lord, Lord Bradshaw, who have just spoken, I bring no expert knowledge or insight to the discussion this evening. I therefore hope that it is not presumptuous for me to add a word of warm welcome to the Bill and my appreciation of the hard work that has been put into its preparation by the men and women of the Assembly and the team of civil servants in both Cardiff and London over the past five years. I understand that it is a Bill that has commanded almost universal acclaim in Wales.
	I must hasten to add that like the noble Lord, Lord Roberts of Conwy, and other noble Lords, I too have received this evening the letter from the Very Reverend Archimandrite Father Deiniol from Blaenau Ffestiniog in Gwynedd. He argues powerfully that unless the Bill is extended to include certain aspects of rail transport it will give us something less than a properly integrated transport system in Wales. I am grateful to my noble friend Lord Evans for having related the Bill's long history and the scrutiny of the draft Bill. However, I note that the Assembly's Economic Development and Transport Committee in its report dated July 2004 drew attention to what it described as the,
	"extremely short time available for this scrutiny of the draft Bill".
	Those words can be found on page 10 of the report. I hope and trust that the UK Government will take account of that message.
	The Bill represents an important contribution to economic and social development, but for many people it is also welcome for the opportunity it may offer to promote environmental sustainability, which everybody agrees is essential. How likely is that to come about? I shall dwell on that question for a minute or two.
	The term "sustainability" is embedded among four other adjectives in Clause 1(1)(a) yet we know that there is an existing overriding duty on the Assembly to make a sustainable development scheme that will apply to all its functions and relate to all its fields. That duty is to be found in Section 121 of the Government of Wales Act 1998. I have always thought that that provision has considerable potential, although nowhere in the 1998 Act or in the Bill have I seen a definition of the meaning of the word "sustainable". Given the existing duty in Section 121, and notwithstanding what is said on this matter in the report on the draft Bill published in July 2004, I am somewhat puzzled as to the significance of the appearance of the word "sustainable" in Clause 1(1)(a). Can my noble friend confirm whether it adds anything to, or is different from, the duty in Section 121? It seems to me that the position remains the same and is untouched.
	According to what I have heard, there is some concern in some quarters that the sustainable development scheme has not worked as well as was hoped in 1998. Is there any sound basis for such concern? Can the Minister tell the House how much progress has been made by the Assembly in achieving sustainable development? I appreciate that the Minister may not be in a position to deal with that question tonight and may prefer to respond to it in writing.
	Turning to the future, is the Minister able to indicate whether the Wales transport strategy, to which he referred, will set out the environmental quality to be achieved over the next 10 or 15 years? What will the target be? How radical will the vision be? I use the word "vision" because the Economic Development and Transport Committee refers to its vision for public transport in Wales. The Bill goes on to arm the Assembly with a mechanism for implementing the transport strategy. Is the Minister in a position to give some clearer idea to the House of whether it will require funding in addition to the £8 billion to be made available over the next 15 years that was announced a year ago by Andrew Davies, the Assembly's Minister for Economic Affairs? Has that money been ringfenced? Indeed, does the Assembly know today—is it possible for any government to know—how much money will be required to implement a transport policy effectively over the next 10 or 15 years in a fast changing world? From what is known, will £8 billion be enough? It usually never is. Will any additional funding that may well be necessary be made available by the Assembly?
	I have only one more question for the Minister. We are well aware that there are huge tasks ahead for the National Assembly for Wales during the next few years. For my part, I would not underrate the difficulties that may lie ahead. It is that that induces me to ask whether the Assembly has the essential human resources in order to cope with the immediate implementation of the Bill and of the Government of Wales Bill, on which Ministers and officials in London and Cardiff are working very hard.
	That is my last question, but finally I offer one comment on the historical significance of the Bill. We have never before had a Transport (Wales) Bill and in the long history of your Lordships' House since it became a second Chamber, it has never before, as far as I can see, had two Wales-only Bills before it at the same time. I suggest that this is evidence that the old order changeth, and none too soon for Wales, thanks to the momentum of devolution and the Government of Wales Act 1998.

The Earl of Mar and Kellie: My Lords, the Bill is devolutionary in trend and so I support it. It is quite obvious that I do not come from Wales. However, one of my great-grandfathers was Lord Penrhyn, who, unfortunately, was one-half of the three-year strike by quarrymen around about 1900, about which I shall cease being boastful.
	When I looked at Clauses 1(1) and 2(1), (2) and (3) and I saw the word "must", I wrote down beside them, "Does this really constitute devolution?". I do not believe that devolved power and "must do something" go together. I went on to write down, "Of course they should have a strategy, but should choose to do so themselves". The terminology of the Bill is heavy-handed and does nothing to rebalance the lopsided federalism to which it purports to contribute.
	That said, I praise the Bill for devolving control of the passenger railway service. However, I wonder why it does so only by implication. Why can we not have the devolution of control of the Welsh rail franchise on the face of the Bill? I did not see it there anyway; perhaps it is there.
	My main concern about this exercise in devolution is about how limited it is when compared with the devolution of transport in Scotland—where I do come from. The recent transfer of financial control of Network Rail in Scotland and of the ScotRail passenger franchise has given the Scottish Parliament most welcome powers to press ahead with developing the rail network and expanding it. And now I shall start being boastful again—but not, noble Lords will be pleased to hear, about my achievements or those of my family.
	On 26 September 2005, the Queen Street to Maryhill service was extended to Anniesland. The reopening of the railway to Larkhall on 11 December this year symbolises the renaissance in railway use in Scotland, as does the work being undertaken right in front of my home on the Stirling, Alloa and Kincardine Railway which will benefit passengers, freight, coal and the Forth rail bridge, as well as Edinburgh commuters who will be able to have more paths across the rail bridge because the coal is now coming through Alloa.
	The Scottish Parliament has before it Bills and plans for a railway in the Borders from Galashiels to Edinburgh, long overdue rail links with Edinburgh and Glasgow Airports and two tram lines in Edingburgh. Consideration has been given to reopening the Bathgate to Drumgelloch railway, thereby recreating a fifth rail route between Edingburgh and Glasgow. Moreover, a sixth route is being considered for bullet train use in the future. Historians of Scottish railways will note that there were six rail routes between Edinburgh and Glasgow, but I know of no proposal to reopen the first one, the Slamannan Railway.
	Meanwhile, on the roads, the Scottish Executive's consultation is expected to conclude in the very near future on Scotland-wide free bus travel for older and disabled persons. I accept that going on like this is irrelevant to this Bill.

A noble Lord: Hear, Hear.

The Earl of Mar and Kellie: My Lords, I have had at least some response. However, I think that it is worth spending a minute or so on these matters as they demonstrate that a more substantial devolution of powers can be more creative. Devolution also takes away the undoubted, and not necessarily unreasonable, focus of the United Kingdom Government and their transport department on the overpopulated south-east of England—perhaps to the chagrin of the other English regions.
	The British Labour Party's unionism has created a generously financed Scotland, and presumably that is so in Wales. I like the tactical situation but doubt the strategic context; of course, for me, dominion status rather than devolved status is the goal. This Bill will bring more control of transport to Wales but could be improved on.

Lord Jones: My Lords, my noble friend Lord Evans gave, as usual, a cogent and persuasive introduction to a Bill in his care. The noble Lord, Lord Roberts of Conwy, gave, as only he can as a long-serving former Minister on Welsh affairs, an experienced, informed and, at times, slightly rumbustious view of the Bill. The noble Lord, Lord Bradshaw, has unmatchable insight into rail travel—after all, he has done it and he gave a positive report. The noble Earl, Lord Mar and Kellie, made a tangential and modest remark about the great north Wales slate strike. It remains, I have to say, a scarring sliver of our social history and still stirs the blood on its memory. The quarry museum and the great Penrhyn Castle remain as reminders of that history. It might be interesting to have a conversation rather than a debate with the noble Lord about that historic moment that so greatly scarred our people.
	I welcome the Bill, which greatly enhances the Wales Assembly Government's capabilities of developing an economic transport system. Geography challenges the desire to unify the land of our fathers. The grain of the land makes it harder to travel from the north to the south of Wales and, indeed, easier to travel east to Liverpool, to Birmingham and to Bristol, or so it used to be for generations after Wales became an industrial nation. But now there are very positive factors; for instance, the building of the M4 motorway and the two mighty bridges across the River Severn estuary, plus the inauguration of the 125 high-speed train of some years ago, and the expansion of Cardiff Airport. These modern transport infrastructure initiatives have transformed south-east Wales.
	That region's economy is now one of the most dynamic in western Europe. Improved communications have made a massive difference to this part of Wales. Of course they remain imperfect, but inward investment has materialised on the back of improving strategic communications. I think that the old Welsh Office and the Welsh Assembly can be proud of their foresight and of their investment.
	I recollect, as a Minister with transport responsibilities in the administrations of the late Lords Wilson and Callaghan, that the Welsh Office officials, with whom I worked, were of the highest calibre. They laid good foundations. I personally owe them a great deal. I believe that the current assembly team is of the same quality. They certainly care.
	The Wales Assembly Government have earned and deserve the additional powers presaged in the Bill. We can only welcome Clause 2 and its dwelling upon the requirement of a strategy. That strategy I believe will be successful because the clause emphasises consultation with the local authorities of Wales. That must be the way forward.
	As the Minister said, Clause 8 itemises a Public Transport Users' Committee for Wales. As Wales is a small nation, I think that we can make this committee a success and the transport providers truly responsive to the long-suffering and frequently ignored passengers. Can we, with special measures, seek to protect and reassure female passengers as this legislation becomes functioning reality? Surely there are initiatives that we might take.
	I suggest, as and when it is possible, that the Welsh Assembly should consider electrifying the Wrexham-Birkenhead railway. The axis of that railway line travels through a densely populated and increasingly prosperous community in north-east Wales. There would be a certain economic return from that investment. It is not, however, a cheap scheme. Secondly, I think that the Assembly should urgently take passenger rail services into Deeside Industrial Park in north-east Wales. With over 6,000 employees, the Deeside Industrial Park is one of the foremost industrial locations in western Europe. It should have rail services.
	Thirdly, the Assembly should set up quite speedily air services from Cardiff to locations in north Wales. Our seat of government, Cardiff, is truly far away from Llangefni in Anglesey, from Caernarfon in Gwynedd and from Hawarden in Flintshire. I think that an urgent, imaginative approach could shrink Wales and unite it as well. Her Majesty's Government use the phrase "Intra Wales Scheduled Air Services". Whatever they may be described as, can we please have them urgently, at least to see whether they are viable?
	Fourthly, I hope that the Assembly will guarantee the future of the Central Wales line and lobby constantly for the continued retention of the Shrewsbury-Newport railway line. Perhaps the Assembly should institute studies designed to make the north/south road link a faster and better road. I need to declare at this stage that I am president of the Wrexham-Birkenhead Rail Users Association—a most honourable and long-standing voluntary group of dedicated enthusiasts and often employees of the industry.
	To conclude, the Welsh Assembly is not yet two terms old but it has come a long way quickly. It has earned the vote of confidence that this Bill represents. With this legislation in its hands, the Assembly Members and its industrious Cabinet Ministers surely can have greater confidence in their capacity to get things done in the sphere of transport.

Lord Rowlands: My Lords, like my noble friend who has just spoken, I, too, welcome the Bill. I welcome it as a useful, practical step forward in the search for an integrated transport system in Wales but, like my noble friend Lord Prys-Davies, I also welcome it for another reason; that is, its historic nature. As he pointed out, not only is it the first Bill of its kind but there is another first attached to it: this is the first time that the Assembly and the Select Committee for Welsh Affairs in the other place have jointly formally taken evidence and reported—albeit separately, as I think they should do. That unique process is important. I believe that the development of a joint legislative partnership of the kind that we are beginning to see is important for the future of Welsh political and social life.
	While I served on the Richard commission I became convinced that one of the most distinctive features of the Welsh devolution settlement could and should be a distinctive legislative partnership between the Assembly and Westminster. We see that some of those views are reflected in Chapter 13 of the Richard commission report; they are also reflected in the White Paper Better Governance for Wales that we have not yet had a chance to debate but which is before us. The Bill is also a product of that growing legislative partnership between Assembly and Westminster. As my noble friend pointed out, complementary joint scrutinising skills of the Assembly and of the Commons and its Select Committees come together in a useful and important way and are reflected in the way this Bill has been shaped.
	As my noble friend pointed out—I wonder whether the noble Earl, Lord Mar and Kellie, has properly realised this—the original Bill that went through the scrutiny process did have clauses relating to the railways. They were not cast aside—they were in fact shorn from this Bill and have become the appropriate sections of the Railways Act 2005. Those powers that are now in the Railways Act 2005 transfer significant powers and responsibilities to the Welsh Assembly. For example, under the Railways Act provisions the Assembly will have the power to offer financial support and assistance to the franchisees; it will be involved in the whole franchising process and it will have the power to offer financial assistance to railway developments.
	In that context—and perhaps in answer to the point that the noble Earl, Lord Mar and Kellie, raised—I wonder if my noble friend could confirm that the powers in the Railways Act 2005, which devolved powers to the Welsh Assembly, are equivalent to those of the Scottish Executive? Will my noble friend compare them and tell us whether the powers that the Welsh Assembly has are now on a par with those that the Scottish Executive has in relation to franchising and the capacity to finance and support railway developments? I would be grateful if he could confirm that, just in case there is a misapprehension that there has not been a significant transfer of responsibilities relating to the railways; although they are not in this Bill, they were in the Railways Act 2005.
	The vital challenge for the Welsh Assembly is to marry the powers it is going to obtain in this Bill with the powers that it has already obtained from the Railways Act 2005. With those powers and in relation to an integrated transport system, the powers related to the railways will be vital. I therefore hope that my noble friend will confirm that the Assembly has such powers.
	In that context, I hope that my noble friend will answer a second question. My noble friend Lord Prys-Davies already raised the question of funding and financing. This Bill does not generate a huge amount of costs except in relation to setting up transport authorities and so forth. So extra money will come to the Assembly not under this Bill but under the Railways Act. In that context I wonder if there will be—and there should be—a comparable transfer of funding and support from what is a central government department to the Assembly. I understand these negotiations and discussions have been taking place but I think it would be useful if my noble friend could give us the rounded picture of the situation concerning the devolving of transport policy. How far have these negotiations reached?
	The transfer of the subsidy money and the rest of it that should come to the Assembly attached to the powers that it is going to receive under the Railways Act: could the Minister give us a rough and ready? We will not pin him down to the last pound and pence, but could he give us some idea of the estimated amount of money that is likely to take place with the powers that have been transferred under the Railways Act? These will be vital. As my noble friend Lord Prys-Davies said—rightly in my view—this Bill has to be funded from within the existing annual budget. But the extra powers that are now going to be given to the Assembly under the Act should have with them the appropriate transfer of funds and support. I would be grateful if my noble friend could tell us a little bit more about that.
	The noble Lord, Lord Roberts of Conwy, was a little curmudgeonly, if I may say. I pay tribute to him for the work he has done. It was under his period in office that the wonderful A470 was built which means that at last one can get to Cardiff from Merthyr somewhat easier than the missionary going from Dowlais who, when she reached Quakers Yard said, "Well that's the worst part of the journey over". He and I opened the road together and his name is on the plaque in the middle of the road, so I accept the contribution that he made to the road building. But he did not make the contribution to the A465: the dualling is now taking place and his remarks on the development of the A465 post-dates him and there is now a very important dualling section open on the road.
	The noble Lord, Lord Bradshaw, certainly struck a chord with me in his observation of the difficult balance that has to be struck between timetable targets and connections. As someone who is every week biting his nails wondering whether I am going to catch the connection from Swansea West or vice versa on the Great Western line, the fear that, because Arriva and Great Western want to maintain a very strict timetable, I will watch the train which is supposed to be the connection leave as we are pulling in is a real one. That important balance must be struck. But having said that, I must say to the noble Lord, Lord Bradshaw, and others that the railways are packed. I agree with his observations about the state of the valley stock and indeed Arriva is not great either. One climbs on these trains with luggage and everything as many people are going west. I do believe that there is a need for action on stock.

Lord Bradshaw: My Lords, if I may just interrupt the noble Lord, it is not really Arriva's fault. It runs trains in Denmark and it runs them extremely well. It has restrictions placed on it—it is not allowed to have new rolling stock and is just making the best of what it has got. It is not allowed to buy any more.

Lord Rowlands: My Lords, I am most grateful to the noble Lord for that, he is infinitely more knowledgeable of these matters than I am. I am just a traveller and I hope that the point that the noble Lord makes will be understood.
	I wish the Assembly well in its ambition to achieve an integrated transport system. In this, my eleventh Parliament, every government and every parliament has been searching for the holy grail of an integrated transport system.
	My noble friend Lord Anderson and I were in the Commons in the 1960s when Barbara Castle's great, ambitious, ill-fated attempt to move freight from road to rail fell apart. Successive governments have searched for that Holy Grail.
	I think that we would all agree that this Bill is a little less ambitious, but perhaps by pursuing pragmatically the policies that we will now be allowed to pursue, given the legislative powers that the Assembly will have, we will find that Holy Grail of an integrated transport system for Wales.

Lord Anderson of Swansea: My Lords, like my noble friend Lord Rowlands, I am a traveller; I can claim no other interest in the railways. I am delighted to follow my noble friends Lord Jones and Lord Rowlands, with both of whom I have served on many Welsh Grand Committees. This is rather like an old boys' reunion, together with the noble Lord, Lord Roberts of Conwy, who now speaks from a different side of the House.
	I begin with two preliminary observations and then seek to give some cautionary notes about how the Assembly may respond to the welcome powers that the Bill passes to it. I will not labour my first point, as the Minister and my noble friend Lord Rowlands made it well. The Bill is a model of co-operation between Westminster and the Assembly. My noble friend Lord Rowlands was a distinguished member of the Richard Commission. There seemed to be a great divide between the Assembly and Parliament, and a need to bridge that gap. It can be shown that that is possible by seeking pragmatically to work together. The history of the Bill has been outlined: its publication over a year ago, pre-legislative scrutiny to ensure that the terms are not set in tablets of stone, and then the relevant committees of the Assembly and this House working together. It was a model of co-operation. There has been so much scrutiny of the Bill that cynics might say that there is nothing left for us to do or say, but that has never stopped any Member of this or indeed any other House adding further. The Bill is a model of partnership of which we totally approve.
	Secondly, this transfer of powers to the Assembly is very proper, because transport is so vital to its other responsibilities that it is wholly appropriate that it should take the lead in that field. Currently the Assembly has very limited powers but there are massive problems. It is now charged with the duty of both developing and implementing policy. I join my noble friend Lord Rowlands in asking the Minister to set out the differences between the powers now available to the Assembly under the Railways Act and those available to the Scottish Parliament. Obviously, we cannot reasonably ask for that now but it would be helpful in terms of grants for the transfer of freight to rail, investments in rolling stock and infrastructure, and so on.
	I think that everyone would agree that under governments of all stripes there has been massive underinvestment in the railways. Some 10 years ago, the Western Mail compared the Paddington to Swansea line with the line from Paris to Angers, both of which are about 200 miles long. The conclusions were alarming. All the indices favoured France, not only in terms of speed but in pricing, punctuality and so on. That differential is almost certainly still there. In some ways, the journey times have worsened over recent years because of the need to reach targets. We welcome the fact that, now that the Wales and Border franchise has been awarded, all regional and local services are provided by a single operator.
	The Assembly may face new temptations under the new scheme of things. I wholly accept that the Secretary of State's powers should be transferred to the Assembly. But let us not close our eyes to the fact that in Wales, be it hiraeth or our wonderful valley spirit, there is a certain parochialism, which does not provide a basis for strategic planning. Those dangers may be seen, for example, in how we made our local government changes: the counties were far more extensive geographically, so they were far better for planning, particularly in transport. Now that we have the possibility of joint authority under the Bill, the Assembly will have to guard against excessive parochialism.
	Although Wales is a political expression, and a historical and cultural entity, it is not a geographical area. There may also be a temptation, when drawing up a Wales strategy, not to look at the border areas and how important developments on the other side of the border have an impact on Wales's own transport infrastructure. Many years ago, before the M4 was completed, I argued that the completion of various stretches of that motorway in England, as we got lost in the highways and byways of Wiltshire, was far more important for development in Wales than any development in Wales. Perhaps that is a lesson to look more widely, including at the border areas, when devising an all-Wales transport strategy. In the past, there has been a failure to recognise that key developments at the other side of the border are very important.
	The Assembly's increased responsibility may accentuate the difficulties of looking at the big picture. Quite understandably, many Members of the Assembly see their role as winning the bacon for their own area: if there is a cake to be divided, everyone must have their own share, even if it is a fairly small slice. Yet in Welsh strategic terms, a bigger picture for large-scale investments may be needed. I fear, for example, that the Hafod bypass in Swansea may not have had sufficient priority because it would take too large a slice of the cake and too little would be left for others. That temptation must be guarded against. Of course that temptation exists now for Parliament and the Secretary of State but he can stand aside in a way that would be a little more difficult for the Assembly to do.
	I hear what is said about the intra-Wales regional airport strategy. I have had some experience of the, alas, abortive air link between Swansea, Cardiff and London. There are lessons to be learnt. Is there a danger, when there is a link between north and south Wales, that one will cater only for the elites, travelling from north to south? One should look very carefully at the subsidies for those air links.
	Notwithstanding the understandable temptations that I have set out, I join my noble friends in commending the Bill. I adopt the two questions that my noble friend Lord Rowlands posed to the Minster. The transfer of powers and responsibilities to the Assembly will require much understanding, co-operation and goodwill between it and the local authorities in Wales and their own transport strategies.
	A similar amount of understanding, co-operation and goodwill with English local authorities will be required, which should be done in a spirit of consultation and reasonableness. The way in which this Bill has proceeded so far and the way in which the Assembly has shown itself willing to co-operate, listen and modify augurs well for the points that I have made. Therefore, those temptations may be avoided by our colleagues in the Assembly.

Lord Roberts of Llandudno: My Lords, I feel privileged to take part in this debate with so many of my fellow Welshmen. I am not procedurally allowed to call them my friends, but we all have one interest at heart; that is, transport to fit the need of the people of Wales. I welcome the Minister and the Bill that he presents. However, in 50 years' time, my grandchildren, or perhaps my great-grandchildren, may look at this Bill and see that it was calling for an integrated public transport system in Wales. They will see that there was no mention of railways. Even though there may be another Bill, we have to realise that we cannot proceed with this Bill without recognising the need for railways. Almost all noble Lords who have taken part in the debate admit to that. It is a strange Bill. It is more properly a Wales bus Bill than a Wales transport Bill.
	It is not possible to have an integrated public transport system in Wales without including railways. I am sure that what I am saying bears no substance, but, 25 years ago, there were proposals—I am sure that the noble Lord, Lord Jones, and others will remember this—for the north Wales line to go as far as Chester and for the Holyhead to Chester route to disappear. I am nearly certain that omitting railways from this Bill does not hide such a secret agenda. But to
	"Make provision about transport to, from and within Wales"
	without mentioning railways, is not the best Long Title for the Bill. In Committee we will move amendments to include railways in the Bill. I am sure that the Minister would expect nothing less from us.
	Railways are vital to Wales in order to move as much traffic as possible off the roads, to avoid congestion, to be more environmentally friendly and to enable people to travel when the weather is bad and the roads are perhaps impassable. So we need not only to maintain the present railway network but to improve it. In my own part of Wales—the noble Lord, Lord Roberts of Conwy, will know about it—there is a possible upgrade to the railway from Blaenau Ffestiniog to Llandudno Junction, so that it will carry not only passengers but also freight. We need that.

Lord Rowlands: My Lords, I apologise for interrupting the noble Lord. But has he looked at the powers in the Railways Act 2005 relating to Wales? They devolve to Wales responsibility for the very powers which I think he is seeking. There is no point in duplicating them in another Bill if they are already in an Act of Parliament.

Lord Roberts of Llandudno: My Lords, my point is that to call this an integrated transport strategy for the whole of Wales without mentioning railways is an anomaly. There is something missing in the Bill. I will not ask the Minister many questions today. However, there is no extra financial help, apart from what is already in the Welsh Assembly budget. There is not a penny more. Financial assistance for aircraft, airstrips and airports has been mentioned. Where will that money come from? Where will the money to set up a transport users committee for Wales come from? Where will the subsidies come from? As far as I can see, there is not an extra penny available to meet those requests.
	One of the great success stories of Cardiff and the Welsh Assembly Government in recent years was when we had the Liberal Democrat/Labour partnership government. We introduced free bus travel for pensioners, which has been a real boon for pensioners in Wales. It has enabled them to travel—and I think that all noble Lords who have spoken today are eligible for that free bus pass.

The Earl of Mar and Kellie: Not us, my Lords.

Lord Roberts of Llandudno: My Lords, I am sorry. There are two or three noble Lords who are not of Wales. I withdraw that remark. But all noble Lords who are from Wales are eligible. Bus routes, which would otherwise have disappeared because there were not enough passengers or income, were safeguarded. I am so glad that England and—as I hear from my noble friend Lord Mar and Kellie—Scotland are moving in that direction. What Wales does today, the rest of the United Kingdom follows suit tomorrow.
	As one who avails himself of the freedom pass in London, I know that one can use it not only on buses but, at certain times, on railway routes. Could that not be considered by the Assembly? My noble friend Lord Bradshaw referred to the co-ordination of timetables and how that is forbidden. At the beginning, we had very unhealthy competition by various bus companies in order to be the first to pick up customers. The Government must think again on that. Co-ordination of timetables and routes is essential in order to have the best possible service to meet the needs of the people of our communities.
	Some people may say, "But we need choice". Choice is not a word that we can use in most of Wales. There may be one shop, one school and one doctor's practice, and the nearest one may be many miles away. Choice might exist in areas of greater population, but not in rural areas. Without choice—except Hobson's choice—we must ensure that we present people with the very best that can be provided. The only bus needs to meet the needs of local passengers. Co-ordination must make certain that connections are met. For example, a train may arrive at Llandudno Junction from Blaenau Ffestiniog at 10.03 am, but the London train has just gone. We must consider the whole issue. I am sure that the new set-up in Wales will be very helpful in providing the best overall transport strategy for Wales.
	As regards air transport, we have a small budget and everything has to be met from the present Assembly budget. We need to look at that very thoroughly. What is the best use of the money available? Is any commercial company ready to undertake this type of travel? More than a feasibility study is needed. Thoroughgoing research is necessary in order to investigate whether, if we had money and anyone could convince us, it would not be better spent on air transport or on improving our roads and railways. At the moment, I think that the jury is out on that. If there are proposals on that, we need to be thoroughly convinced that they are the right proposals.
	We look forward to the debates in Committee. We are all going in the same direction. Together, I am sure that we will try to ensure that the best fully-integrated transport service will serve adequately the people of Wales.

Lord Evans of Temple Guiting: My Lords, I am most grateful to all noble Lords who have taken part in this short debate. However, I have a problem. My noble friend Lord Jones referred to the quality of the officials here from the Assembly. I have to say that they have answered every question asked today. If I speak to the notes and answer the questions in the detail required, I will speak for a minimum of 45 minutes. I propose to touch on some of the most important points, but I will not ignore the very valuable and significant points that have been made. We will get back to everyone with an answer so that before the Committee stage noble Lords will have a complete picture.
	One thing that has emerged from this debate is the acknowledgement that we have a model of co-operation between Westminster and the Assembly. I noted that point in my opening speech and would like to note it again because it is of great importance and bodes well for the future.
	One of my noble friends described the remarks of the noble Lord, Lord Roberts, as curmudgeonly. I thought that he was a little tough on the Bill, but we all noticed that, after he got a few things off his chest, he said that there was a sense of urgency and a need for this Bill in Wales. He said that one organisation had given transport in Wales a 'C' grade. We acknowledge that the purpose of this Bill is to improve on that.
	The noble Lord, Lord Roberts, asked whether the Assembly had made any significant transport improvements. He expressed that in such a way that he perhaps expected a minimalist answer. In fact, I have in front of me two foolscap pages of what has been done. It is precisely the sort of document that needs to be circulated to everyone rather than for me to stand at the Dispatch Box going through every achievement. What has been done is of considerable significance and I hope that when the noble Lord, Lord Roberts, sees this he will agree with me.
	The noble Lord also talked about the lack of progress on road schemes. Again, we find that difficult to accept. The Assembly Government are committed to the delivery of a new M4 around Newport to relieve congestion on existing motorways. The preparatory work is in hand. Construction will start in 2010 with completion in 2012 subject, of course, to statutory procedures. On the A465 heads of the valley road, which was mentioned this evening, we are committed to a complete dualling between Abergavenny and Dowlais, near Merthyr Tydfil, within 10 years—by 2014.
	The noble Lord asked us for an assurance that there will be a realistic demand for a service before any subsidy is given. We have undertaken a major scoping study, including modelling work, to forecast passenger demand for a Cardiff to RAF Valley service.
	Related to that, noble Lords asked for projections on numbers for an intra-Wales air service. Consultants have projected 13,000 passengers a year increasing to 18,000 by year four.
	The noble Lord, Lord Bradshaw, brings his considerable expertise on transport to bear on this Bill and argues that incentive systems and franchises are counter effective. The Assembly is a cosignatory to the Wales and Border franchise and will be able to influence all contractual issues, including penalty incentive arrangements. We should note that the Assembly responsibilities commence when 13 years remain on the existing franchises that have a legal contractual basis. On the existing franchise, there may need to be some negotiation with the existing train operating companies. He also pointed out the need for better, more suitable rolling stock on the valleys service. The Assembly this year announced investment in additional rolling stock to alleviate valleys overcrowding, which provides for more than 2,000 extra peak seats or some 27 per cent additional peak capacity. That happens to be used rolling stock class 150 sprinter vehicles, which are very suitable for use on the valley network and represented better value than new rolling stock had any been available. The Assembly is in discussion with Arriva Trains Wales about its future rolling stock needs to meet increased demand which continues to rise.
	The noble Lord, Lord Bradshaw, also asked whether the Assembly has powers to enable it to amend franchises for the Wales and Border region without going to England. The Assembly will become a joint signatory to the Arriva Trains Wales franchise with the Department for Transport. The Assembly will be the funding authority for the franchise and will be able to specify service patterns. Finally, the noble Lord asked about the possible non-exclusion of half hourly off-peak Cardiff to London rail services. As part of the bidding process, bidders were asked to cost certain options. One of those was the half hourly off-peak service between Cardiff and London. It should not be assumed that the half hourly off-peak services between Cardiff and London will not form part of the new franchise specification. Decisions will be made on the basis of best value for money, but no decisions will be made until the true costs are known.
	My noble friend Lord Prys-Davies, in welcoming the Bill, asked a number of searching questions. We talked about the Conwy Valley line and the Welsh Assembly Government recently received Network Rail's revised cost report on the upgrade to the valley line that will be needed to carry heavy slate waste on that route. My noble friend said that the Bill will provide less than a fully integrated transport system.

Lord Prys-Davies: My Lords, I did not myself make that criticism. I said that that was the thrust of the criticism that I had received in the letter.

Lord Evans of Temple Guiting: My Lords, I beg my noble friend's pardon. I thought that he had received a letter and was putting his name to that criticism.
	The Bill, together with powers in the Railways Act 2005, will give the Assembly a coherent and comprehensive set of transport powers for the first time, which is to be welcomed. My noble friend Lord Prys-Davies raised an important point about sustainability—meaning the inclusion of the word "sustainable" in "general transport duty" in Clause 1(1)(a). The word "sustainable" was added to the Bill as a result of the pre-legislative scrutiny. It emphasises the commitment to sustainability in Section 121 of the Government of Wales Act.
	My noble friends Lord Prys-Davies and Lord Rowlands both mentioned finance. If money is ring fenced for transport as a result of Andrew Davies's review, is £8 billion enough and is there any additional funding for transport within the Assembly budget? The £8 billion is the funding identified for transport in the Assembly's budget over the next 15 years. Of course, it would be possible to spend more on transport, but the funding will deliver a major transport programme making integrated transport a reality throughout Wales.
	The noble Earl, Lord Mar and Kelly, gave us an important Scottish perspective. He asked why devolution of the rail franchise is not included in the Bill. The Assembly gained the power to become cosignatories to the franchise for passenger services in Wales under the Railways Act 2005.
	My noble friend Lord Jones asked about the electrification of the Wrexham to Bidston line. No specific figures have been given for the cost of electrification. However, all electrification schemes are very expensive. For example, the cost of electrifying the much longer North Wales Coast line was estimated to be £300 million three years ago. There is unlikely to be funding available from the Strategic Rail Authority or the Department of Transport.

Lord Jones: My Lords, I am grateful to my noble friend. Before he sits down, might he consider the prospect of a passenger link in Wales into the huge Deeside industrial park, which I did mention?

Lord Evans of Temple Guiting: My Lords, as I said at the beginning of the debate, any idea that comes up during the course of the evening will be carefully considered, and we have made a note of that one.
	My noble friend Lord Jones asked about passenger rail services to Deeside industrial park. The Assembly is in discussion with the north Wales local authority consortia on rail services in north-east Wales and is awaiting the outcome of a detailed study. The noble Lord also makes the point, which we totally agree with, that the development of air services within Wales is an extremely good idea.
	My noble friend Lord Rowlands asked whether the powers in the Railways Act 2005 were the same in Scotland as in Wales, in relation to the franchise and funding. The brief answer to that is no, they are not the same. The Welsh rail network is much more closely integrated with the network in England than is the case for Scotland. The arrangements will enable the Assembly to achieve its objectives by allowing it to determine the pattern of rail services in Wales for the first time. The Assembly will also be able to ensure that its requirements are met in terms of developing the network.
	Crucially, my noble friend Lord Rowlands asked about the transfer of funding from the Department to the Assembly for Wales, and the border franchise. Yes, a transfer is under discussion between my right honourable friend, the Secretary of State for Transport, and the Assembly. It will represent the agreed current cost of rail services for which the Assembly takes responsibility—for example, excluding the few England-only services. As far as the timescale is concerned, the aim is to reach agreement to enable the transfer in the 2006–07 supply estimates. The annual amount of £120 million plus was announced in 2003, when the ATW franchise was agreed uplisted by inflationary indices.
	My noble friend Lord Anderson asked a very important question—which I will not attempt to answer now—on the comparison of relevant powers over transport between the Scottish Parliament and the Welsh Assembly. As I said at the beginning, to answer that in detail would prolong this debate, if not into the small hours, much later than we are all prepared to go. I will write to him.

Lord Rowlands: My Lords, will my noble friend at least confirm that as a result of the changes in the Railways Act 2005 there is indeed a significant transfer of responsibilities and powers to the Assembly on railway matters?

Lord Evans of Temple Guiting: My Lords, yes, I can confirm that and am most grateful to my noble friend for making that point.
	My noble friend Lord Anderson also asked about the cross-border considerations of the strategy development. The Bill contains a statutory requirement on the Assembly to consult with local authorities in England that border Wales, as well as with Welsh authorities, on the Welsh transport strategy. Nothing in the Bill as drafted will give the Assembly any powers over English services, but it would be required to consider cross-border issues in the development and implementation of its transport policies.
	My noble friend Lord Roberts of Llandudno said that there is no mention of rail in the Bill, so how could it possibly be an integrated system? He is sitting there nodding, so I will now try to tell him. We have already really dealt with this in other speaking notes. Rail is covered in general in the transport duty in Clause 1 and will be included in the Wales Transport Strategy. However, this is obviously an issue that will run for a time and I expect that we will be returning to it in Committee.
	The noble Lord also asked where the subsidies are coming from if there is no new money and how the Assembly could possibly afford all these costs. I can confirm that the funding will come from the Assembly's transport budget. The Assembly Government have set out their transport priorities in their £8 billion, 15-year transport programme.
	As I said, any questions that I have not answered will be answered by the very helpful officials before Committee. As I said at the beginning, if there are any issues that the noble Lords would like to discuss with me or the Bill team, we would welcome that. We greatly look forward to returning to many of these interesting points in Committee.
	On Question, Bill read a second time, and committed to a Grand Committee.

House adjourned at twenty-three minutes before eight o'clock.
	Tuesday, 1 November 2005.